Posts Tagged ‘Thyssen’

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

June 30, 2016

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

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

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

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

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

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

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

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

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

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

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

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

Spamfish on Modern American ‘Inverted Totalitarianism’

August 3, 2013

There’s a very interesting piece of political philosophy over at Spamfish’s site, Oprichnik Rising. Entitled ‘Inverted Totalitarianism’, it discusses the political philosopher, Sheldon Wolin’s, characterisation of modern American as an ‘illiberal democracy’, managed through policies and special lobbying groups, with the relationship between the government and corporations forming an inverted, mirror image to those of Nazi Germany and Soviet Russia. It begins

Inverted totalitarianism is a term coined by political philosopher Sheldon Wolin to describe the emerging form of government of the United States. Wolin believes that the United States is increasingly turning into an illiberal democracy, and he uses the term “inverted totalitarianism” to illustrate the similarities and differences between the United States governmental system and totalitarian regimes such as Nazi Germany and the Stalinist Soviet Union.[

Inverted totalitarianism and managed democracy

Wolin believes that the United States (which he refers to using the proper noun “Superpower”, to emphasize the current position of the United States as the only superpower) has been increasingly taking on totalitarian tendencies as a result of the transformations that it underwent during the military mobilization required to fight the Axis powers, and during the subsequent campaign to contain the Soviet Union during the Cold War

Spamfish’s article is at http://spamfish23.wordpress.com/2013/08/01/inverted-totalitarianism/.

It’s well worth reading and I think Wolin’s central idea is largely correct. My only criticism is that in many ways the parallels between the Nazi ‘co-ordination’ of industry and the contemporary influence of private industry on government policy and organisation is actually much closer. Others on the Left have described the modern, Conservative co-option of industrialist and big corporations as ‘Corporativism without the working class’. In Fascist Italy, a corporation was a giant industrial organisation formed to represent the interest of that industry in the Fascist state. There were 12 of these corporations, whose representatives sat in an Industrial Chamber as part of new, Fascist Italian parliament. Each Corporation contained a representative from the unions and the employers’ organisation for that industry, as well as a member of the Fascist party, to represent ‘the people’. In Nazi Germany the middle class organisations, such as the guild and handicraft organisation, which had been campaigning for the greater representation of their interests in the Nazi state, were forcibly incorporated into the Reich Corporation of German Handicraft and the Reich Corporation of German Trade. These formed a kind of compulsory cartel under the leadership of the Nazi party.

There were also short-lived attempts to establish the same kind of corporativist structurre in Nazi German. Attempts to reorganise and align German big business in line with Nazi ideology and policy was countered by the leaders of those industries through their close relationship with Hitler himself, and the support other leading Nazis such as Schacht, Hugenberg, Schmitt and Goring. Following a meeting with fifty leading industrials and bank directors, including Krupp, Thyssen, von Siemens, Stinnes, springorum, Bosch, Vogler and von Stauss, and the heads of the state departments for economic policy and Nazi’s own economic policy advisors, an agreement was made to establish a permanent General Council of the Economy. Heavy industry had a very strong presence in this. Some German industrial leaders were already strongly sympathetic to the Nazis and a corporatist reorganisation of the industrial and social structure. Fritz Thyssen had had contact with Hitler since 1923 and supplied financial support to the Nazis. In collaboration with the advocates of the corporatist state in the NSDAP regional staff, he had set up Institute for Corporatist Organisation in Dusseldorf. Despite this, the party soon rejected such corporativist organisations, and Thyssen’s Institute was forcibly dissolved in 1935. In 1934 the Reich Association of Industry was replaced with the Reich Group Industry. Its leaders and those of the other business associations and chambers were appointed by the state.

The Influence of Private Industry on the Nazi Industrial Organisations

Other Nazi economic organisations were founded as private industries. The Economic Research Association, which was branch of the Reich ministry of Economics, was established in 1934 as private limited company. This was particularly concerned with the construction of fuel depots in strategically important areas. This, and similar departments, were largely untouched by the demands of the state bureaucracy The Nazi state did not attack the principle of private capitalist industry. The state economic planning apparatus curtailed company director’s freedom to manage their own firms, nevertheless the Nazi state tried to operate with the minimum of bureaucracy. In so doing, it allowed the state’s organs of administration and control to be strongly influenced by experts and representatives of private industry. The result of this was, according to historian Martin Broszat, a type of economic leader, who was half state official, and half private businessman.

Nazi Economic Organisation Close to Thatcherite and Reaganite ‘Public-Private Partnerships and PFI

This seems to challenge Wolin’s theory somewhat. Both the Fascist and Nazi states certainly attempted to use the state’s corporativist institutions to control private industry. The above examples from the Nazi regime also shows how private industry attempted to influence Nazi policy, which was frequently carried out through state organisations founded as private companies. The parallels between the Nazis’ policies in this area, and those of Mrs. Thatcher’s and subsequent administrations are particularly striking. Under these administrations, representatives of industry have entered government, and they and their thinktanks and special advisors have formulated government policy. They have also set up private corporations to carry out public policy. An example of this is the Urban Development Corporations Mrs Thatcher set up to circumvent local authorities’ influence and control over the process of urban regeneration. The core of these policies were ‘Public-Private Partnership’ between private industry and the state, and the use of the Private Finance Initiative and government subsidies to support private industry. The Tories’ proposed privatisation of the courts, and the outsourcing of welfare administration to private companies, can also be seen as another example of private industry acting as a government bureaucracy or department similar to Nazi policies in this area.