Sunday, August 7, 2022

Cooking the Books: Structural imbalance (2022)

The Cooking the Books column from the August 2022 issue of the Socialist Standard

Good Morning Britain (ITV 28 June) pitted Dave Ward, General Secretary of the Communication Workers Union against Matthew Lesh of the Institute of Economic Affairs (IEA). Ward correctly identified Lesh as representing the bosses, the IEA being a free-marketeer thinktank funded by big business.

Lesh argued that a large increase in wages would lead to Royal Mail becoming uncompetitive and losing business to other parcel delivery firms paying lower wages. He also claimed that ‘there’s not enough profit margin for a 10 percent pay rise for all workers’.

He is right about capitalism running on profits but going concerns always have enough profit to pay something if workers are in a good bargaining position. When negotiating, unions take into account whether an employer can pay. They are not so stupid as to insist on a claim that would bankrupt an employer with the result that their members lose their jobs.

Trade union negotiations take place within a system where businesses have to make a profit and this places a limit on what unions can achieve for their members. Ward recognised this, saying that there was a ‘fundamental flaw in the system’ within which unions had to operate, a ‘deep structural imbalance of power and wealth’, a ‘structural problem of how the economy is run, how businesses operate that have got to change’.

This would seem to be an oblique reference to capitalism which is based on the owners of the places where wealth is produced and services provided being in a powerful position vis-à-vis the rest of the population. It means that the non-owners can only get a living by selling their labour-power to some employer. Employers hold the whip hand; their employees have to settle on terms which allow businesses to operate at a profit.

Although Ward said ‘it is time to challenge some of the fundamentals of how the economy operates’ and called for ‘a new deal for working people, a new social settlement in the UK’, he was rather vague about what this would involve. The only thing he mentioned on the programme was fixing a maximum ratio between the pay of those at the top of a business and that of the workers, to which Lesh responded by making the (valid) point that, although the bosses were paid high salaries, they weren’t high enough to be used to pay much of a wage increase to those they employed.

In an article in the Morning Star (18 June) Ward was more forthcoming. Criticising the Labour Party for having ‘completely failed to set out any coherent vision to end inequality and division – and build real solidarity amongst working class people’, he called on the unions to get together with ‘local community organisations’ to demand ‘new democratic models of public ownership to deliver better housing, health care, social care, education and transport.’

These are not improvements that unions have the power to deliver. Governments can’t deliver them either, as the failure of reformist governments everywhere has shown. They have all ended up giving priority to profit-making and coming into conflict with workers and their unions. Capitalism is a profit-making system that simply cannot be run in the interest of wage-workers. ‘How businesses operate’ cannot be changed within it.

The only way to end the ‘structural imbalance of power and wealth’ within which unions – and reformist governments – have to operate is to make the means of wealth production the common property of the whole of society. Then production can be re-oriented to directly meeting people’s needs. If Ward had advocated socialism – as a trade unionist who was a socialist would have done – he could have wiped the floor with Lesh. Instead it was a stalemate with Ward having no answer to Lesh’s point about businesses having to be allowed to make a profit.

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