We have all heard Trades Union leaders on television blaming British management for inefficiency — claiming that this is the root cause of “our economic difficulties”. To most people the word “inefficient” means something bad and “efficient” means something good, so they are prepared to believe this claim. It also seems to be in line with their personal experience.
If you intend to erect a fence around your garden because you cannot afford to pay someone to do it, you will soon discover (if you did not know it already) that the most efficient way is first to cut all the timbers to their correct sizes, then to drill all the holes in the timbers, then to dig all the holes in the ground and then to mix all the required amount of concrete — and so on. This, in miniature, is mass production, as compared with performing each process over and over again as you proceed around the garden. Why is this called “being efficient”? Because it saves you labour time — your labour time — and after a hard week’s work this is of benefit to you and your family.
It is perhaps natural to transfer this idea to the larger world of industrial production and to conclude that greater efficiency in the factory will also be of benefit to you and your family. As things are at present, nothing could be further from the truth. Let us quote from a report in The Times of May 6th.
The British Steel Corporation’s plan is to increase output at its low-cost general steel plant at Scunthorpe and strip mill plants at Port Talbot and Llanwern, with the general steel plants in Scotland being supplied with their ingots from Ravenscraig. The effect of this will be to trim between 7,500 and 10,000 jobs in the general steels division and 9,000 to 10,000 jobs in the strip mill division (Our italics).
The above-mentioned plants are obviously more “efficient”, have more streamlined production processes and more up-to-date machinery (like using a power drill to make the holes in your timbers for the fence). But is all this efficiency of benefit to the workers who will become unemployed — or their families?
Who then does benefit by greater efficiency in industry? Someone does or it would not be considered worth striving for. To answer this question we have to understand in broad terms the economics of capitalist production.
The owners of factories, whether they be private companies or state enterprises, purchase raw materials or partly processed materials, together with plant and machinery. They then employ the abilities of
(from opposite) a labour force to produce finished materials or goods. These are then sold on the national or international market and there is a margin of profit for the shareholders or the investors in Government stock. This profit is not plucked out of the air. It represents the difference between the wages and salaries paid to the workers in the factory and the value of the work they have actually performed. Where else could the profit come from? Why do employers of labour try to minimize wages? Why do they use mass production methods? Why do they introduce better machinery? The answer is obvious: minimum wages, less labour time or fewer workers means a smaller wage bill. A smaller wage bill means a larger difference between costs of production and sale price — equals more profit.
All this is called “efficiency”. But it is primarily for the benefit of the shareholders, not the workers in the factory. For them it may, as now, be very much to their disadvantage.
The above quotation from The Times is part of an account of a meeting between a TUC committee and Mr. Wedgwood Benn, the Secretary of State for Industry. The account is concluded as follows:
Mr. Benn, the members of the (TUC) committee said, had been sympathetic and they had told him that in their committee’s view the corporation’s proposals at this stage were completely unacceptable.
So, closing down inefficient plants is now completely unacceptable to Trades Union leaders.
But there is still one more question to be answered. Why were these inefficient plants not closed down or improved long ago? Simply because the demand for steel was such that, overall, a very handsome margin of profit was attainable in the past at the market prices the industry could then command. Now there is worldwide overproduction and fierce competition between producers. The only way to compete is to be more “efficient”, that is, to cut labour costs. It is difficult to see what the TUC committee can do about that.
But there is something the workers can do about it. They can consider a system of production and distribution in which steel (and all the other things they require) is produced to the extent that they need it — and not to the extent that it can be sold at a profit on a competitive market. Such a system is what we mean by Socialism, not Mr. Benn’s nationalized British Steel Corporation or Mr. Heath’s Imperial Chemical Industry.
Let Mr. Benn and Mr. Heath answer one question: why should workers be unemployed when they need the wealth that industry (and agriculture) can produce?
Under Socialism as we mean it, and as the word originally meant, workers would be working for themselves — like the chap fixing a fence around his garden. Then it would be worthwhile being efficient.
John Moore
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