Socialism and Industrial Organisation (1932)

From the May 1932 issue of the Socialist Standard

A reader asks : 

“What is the attitude of the S.P.G.B. to the industrial organisations of the workers. All the other parties claiming to represent the interests of the workers have always had some policy in this matter. The S.P.G.B. appears to lack one. The I.L.P. support the Trade Unions, the Communists back the Minority Movement, the S.L.P. advocated Industrial Unionism, and the B.S.P. favoured certain forms of syndicalism. Where does the S.P.G.B. Stand ?”

Towards the end of last century the work that had been done in placing the workers’ slave position in a clearer light and inducing them to organise on this basis was diverted by trade-union leaders into narrow trade-union channels, and the political parties that arose, such as the S.D.F. and I.L.P. felt compelled to pander to this side in order to attract membership.

When the Industrial Unionist movement first came into existence its appeal on the surface appeared to be so strong that the established parties anticipated that it would sweep the board. Consequently they modified their policy to prevent the feared landslide in membership and to attract more members by appealing directly on the ground of helping the workers in their immediate demands.

The ideas of syndicalists are a survival from conditions in the early days of the capitalist system before improved means of transport and communication and the extension of the franchise had made it possible for a class organisation of the workers to be established. Such ideas arose in countries where capitalism was still immature and where the ranks of the factory workers were still being recruited from among the small producers, i.e., peasants and handicraftsmen. These people carry their old ideas of property relations with them into the new conditions of life. They were accustomed to owning their instruments of production, small plots of land, small workshops and simple tools, either as individuals or as small groups, and when brought into contact with capitalist exploitation they readily adopted the idea that the factory should belong to the group working in it.

At the same time the State appears to these people as a power apart which must be overthrown, but which they cannot hope to control.

In England the developments of international commercial and financial relations have long ago shown such ideas to be obsolete. The mass of the workers have accepted the notion that they cannot do without capital, and that, therefore, the workers in any particular factory are dependent (through the capitalists) upon the rest of the workers in capitalist society. The wage contract hides from them the fact that the capitalists are a parasitical class.

The struggle between the industrial workers and their employers takes, therefore, the form of collective bargaining which requires organisation of a wider scope than that of a factory group. Hence we have Trade Unions accepting the capitalist system of production and trying to obtain for their members the full market price of their labour-power. Socialists organised in the S.P.G.B. recognise that these efforts are necessary under capitalism, but we also recognise that the establishment of adult suffrage provided the workers with a weapon with which they can end capitalism. We regard Trade Unions as insufficient in any case and, in so far as they are composed of non-Socialists, their actions are frequently found to be reactionary, both upon the industrial and the political fields. We do not, however, regard this as a reason for advocating and supporting policies which prove upon examination to be even more reactionary.

Policies which encourage the workers in different industries to entertain the idea that they have interests distinct from those of other sections of the workers, or that incite them to attempt to defy the forces of the State, only result in the weakening of their existing organisations and delay the time when they will organise as a class. Actual history demonstrates that the Trade Unions are superior to alleged alternative forms of organisation as a means of dealing with capitalist conditions, and that in spite of their weaknesses the former survive where the latter are either absorbed or entirely disappear.

Our critic mentions the S.L.P. Its attempts to found an industrial union in this country were a complete failure, and the same may be said of the syndicalist movement with which certain members of the B.S.P., such as Tom Mann, were associated. Towards the latter end of the War, however, leaders of these bodies acquired temporary prominence through their association with the shop stewards and factory committees movement. The comb-out for military needs placed a premium upon skilled workers, and as the employing concerns were making abnormal profits, minor concessions were made to keep the industries working smoothly. An illusory “Workers’ control” became the slogan of the day, misleading many into believing that their emancipation was at hand.

The termination of the War reversed these conditions. The return of millions of workers from the army coupled with the shutting down of munition works and other sources of military supplies, weighted the scale more heavily in favour of the employers in relation to their employees. Leaders of factory committees became leaders of the unemployed, and began to turn their attention from specifically industrial matters to political agitation.

The S.L.P. and B.S.P. went to pieces, and from the confusion arose the Communist Party. The tactics of this body have varied from support of men like A. J. Cook in 1928 (with his policy of nationalisation) to the support of breakaway leaders, such as Allan, of the United Mineworkers of Scotland. Futility has invariably been the outcome and the leaders of the Minority Movement have frequently confessed their failure. (See Daily Worker, Jan. 25th.)

It is instructive to turn to the history of similar movements in other countries. In his “Works Councils in Germany,” Mr. C. W. Guillebaud gives an interesting and detailed account of post-war industrial movements in that country. While the end of hostilities produced somewhat similar results there as in Britain, there was a difference which became more marked as time went on. The German industrial capitalists had to turn from the supply of war materials to the indemnifying of the Allied Powers, which involved a considerable maintenance of production. It was deemed expedient, therefore, to give to the factory committees or works councils a definite legal standing, which, combined with other minor concessions, secured what the masters wanted, i.e., a certain measure of industrial peace. As the author puts it :—

“In 1922 and, indeed, throughout the first four years after the War the councils were often able to extract concessions from the employers by virtue of their bargaining strength and that of organised labour in general. Prices were rising continuously, trade was brisk, and while a strike meant a considerable sacrifice of profits the inflationary process lessened the importance of elements of cost which would have bulked much larger in the eyes of the employers in a period of industrial depression.” (pp. 97-8.)

The boom collapsed towards the end of 1923. The number of those in receipt of unemployment benefit rose from a quarter of a million in September to a million and-a-half in February, 1921 (p. 108). The effect of this upon the position of the workers can be readily guessed.

“(It) placed the employers in a position of unqualified strength within the factory and business undertaking. The Works Councils found themselves forced to remain strictly on the defensive, and became, in fact, more concerned with the question whether they themselves would join the unemployed and have to subsist on the mere pittance given in the form of unemployment benefit, than with the stalwart upholding of their rights and privileges.” (pp. 109, 110.)

Thus the factory committees came up against the same economic forces which placed severe limits upon the activities of trades unions. So far from supplanting these bodies, the works councils were absorbed by degrees in the general movement. Still more striking is the evidence provided by Mr. Maurice Dobb concerning the fate of the factory committee movement in Russia. Describing the situation during the few months prior to the Bolshevik seizure of power, he says :—

“Already under Kerensky factory committees had been given certain powers, and in some cases had assumed or tried to assume more powers than they were actually given so that the industrialists were loudly clamouring for the suppression of the committees within reasonable bounds and the restoration of workshop discipline. Cases of actual seizure of factories were not unknown, though still exceptional ; but quite considerable interference with the management was more general and seems to have been prompted in most cases by the desire of the workers to prevent the closing down of the work and their own dismissal.” (Russian Economic Developments, p. 35.)

For tactical reasons the Bolsheviks supported this movement, but their assumption of power in 1917 led to a conflict between them and the factory committees, in which the latter eventually got the worst of it. As Dobb puts it :—

“After the taking of the political key positions in October, the question of factory committees and workers’ control was still regarded from a tactical standpoint. . . . Industry still remained predominantly under the command of the capitalist, and an extensive system of workers’ control, backed by the political influence of the new Bolshevik State, was regarded as the best way of ensuring that the continued rule of the capitalist in the industrial sphere should be no more than that of a limited monarch.” (p. 38.)

The Bolsheviks were in no position to dispossess the capitalists entirely and establish Socialism. Hence they soon found themselves under the necessity of supporting them against the factory committees.

“What the new government principally feared was that the owners of the factories would bring pressure to bear by closing the factories and locking out the workers. These fears considerably influenced the Decree on Workers’ Control of November 14th, 1917.”

Whilst this gave the committees the right to inspect accounts and maintain discipline,

“Article 7 reserved to the proprietor the sole executive right of giving orders as to the running of the concern, and expressly forbade the factory committees to interfere.” (p. 39.)

The development of the civil war made centralised control of immediate importance to the new State. Thus we read that :—

“In cases of essential industries Vesenha (Supreme Economic Council) elaborated plans of organisation and itself sent officials from the centre to cajole or override the factory committees, conciliate the technical staffs and start production again upon some more satisfactory basis. At the same time the anarchism of the factory committees themselves was curbed by merging them with the trades unions. . . . Trade union influence could now be exercised to secure a uniform policy and observance of government orders and decrees on the part of the factory committees.” (p. 46.)

So that in the very country where it reached the peak of its development, the movement for “workers’ control” eventually became merely a means for securing the survival and smoother running of capitalism. The productive forces cannot be permanently fettered anywhere by such utopian and reactionary conceptions.

Only the common ownership and democratic control of the means of production can emancipate the workers from capitalist control. The establishment of society upon this basis can be accomplished only by the conscious political action of the workers as a class. Workers who grasp these facts are not to be hypnotised by claims made on behalf of any so-called “revolutionary” industrial organisation.

Eric Boden

Blogger's Note:

See the article 'Socialism and Industrial Unionism' in the December 1932 issue of the Socialist Standard.

Kreuger: A Product of His Time. (1932)

From the May 1932 issue of the Socialist Standard

When enumerating the virtues of the present order of society and the difficulties that bar the road to social change in the direction of common ownership, one of the essential points brought forward by our opponents is the part played by the so-called "captain of industry” to-day. It is urged that production on a large scale is impossible without them, that their energy and enterprise depends upon self-interest which signifies the pursuit of wealth and power, and that such incentives being absent from the proposed new social order captains of industry will not develop and large scale production will therefore languish.

Events constantly make plain the weakness of this position, but its supporters continue their advocacy unabashed, partly from interested motives and partly from the sheer incapacity to see and understand the facts in front of them.

One of the periodical sensational cases has now come up for judgment, which again shatters this great man theory and at the same time lays bare the rottenness at the basis of the present social system and the misery this rottenness causes.

A bright star of big industry, Ivar Kreuger, the "Swedish Match King,” shot himself in Paris recently, and when the news was first broadcast the Press united in eulogising him and his achievements; publishing sketches of his life to show how by industry and ability he had built up from a small and insignificant beginning the huge Kreuger organisation that stretched its tentacles across national boundaries, financed governments and brought the whole world into its web. There is no narrow patriotism about big industry, it only uses this sentiment at times to further its economic aims.

Kreuger’s achievement was hailed as a triumph of the principle of "self-help,” the beloved child of Samuel Smiles. One striking feature of this case, however, was the withholding of the news of his death for several hours lest it should have an adverse effect upon dealings in Kreuger stocks. Uneasiness was abroad, and the taking of his life by an apparently successful and prosperous business magnate raised doubts about the stability of the concerns he controlled.

That the fears were well-founded was very rapidly proved. Whereas in 1928 the price of Kreuger & Toll "B” shares stood at £56, on April 19th they fell to 1s. 6d. (See News-Chronicle, April 20th.) Other shares suffered a similar devastating fall and shareholders organisations are being formed to see if anything at all can be saved from the ruin of these vast concerns.

The paeans of praise have turned into torrents of wrath and vilification. The change has been brought about by sensational disclosures alleging gigantic frauds of one kind and another in carrying out the schemes of these companies. It is another sad blow for the captains of industry and self-help worshippers, and comes before they have had time to recover from the Hatry frauds. Yet the path of capitalist enterprise has been marked by constantly recurring instances of this kind, and the explanation is simple.

Leaving aside those who set out from a fraudulent beginning, ambitious men, brought up on maxims of wealth and power, set out to build up large enterprises and use all the capital and credit they can lay their hands on. A business slump, which these optimists rarely foresee, a shortage of available capital, or something similar, interferes with, their projects or stands in the way of some greater achievement, and induces them temporarily to resort to methods which come under the legal heading of fraud, in the expectation that they will be able to put matters right when their designs have been accomplished. Sometimes they are successful and live on as highly respected pillars of society, with the probability of a monument after their deaths. Sometimes they are unfortunate, then economic rivals, frightened financiers, maddened shareholders, and the moralists, unite in condemning them and bringing them to “justice.”

The larger the concerns involved the larger is the scale of fraud, and, in the event of the fraud being discovered or the promoter of it over-reaching himself the greater is the confusion and ruin resulting. Thus, when Hatry fell, there was considerable financial confusion, and many went down in the wreck.

Big industry strives to utilise all the funds it can lay hands on for the purpose of expansion and of enriching those at its head. It puts its hand in the pocket of small capitalists,, shopkeepers, and the better-paid “professional” men, utilising their savings for its schemes. Consequently, it is the heartbroken cry of the small shareholder that usually makes the most noise when a collapse comes, because it is just these people, with economic security in sight, struggling fiercely to get there, who are being constantly ruined and flung into the more hopeless sections of the propertyless class. And yet they are the fruitful soil for the blooming of all the pernicious doctrines of self-help and the like. Striving for economic freedom, unable to accomplish it by their own efforts, they look hopefully to company promoters, provide funds for all kinds of hare-brained schemes, and sing the praises of “great” men whom they trustfully expect will lift them out of the mud. Like all huggers of narrow, petty ideals, they cannot find words hard enough for those who let them down and shatter their delusions.

Another side to this question of relying upon individuals of alleged great directive ability is also seen when crashes such as those we are discussing occur. If the main threads of such large concerns are in the hands of one individual, when he is removed no one knows where to turn and a sound undertaking may be wrecked by the confusion involved. When Hatry was convicted he had to be brought back to help sort out the tangle. Kreuger is dead and apparently no one knows what may happen, because no one has a clear knowledge of what strings Kreuger was pulling.

Of late, doubts have even crept into the capitalist’s breast, and the wisdom of building up organisations that outstrip the powers of control is being questioned.

The trouble, however, does not lie in the size of .the organisation but in the method of control that has to be adopted on account of the private property basis of the organisation.

To-day the duty of the captain of industry is to overreach other captains of industry and collect under him groups of willing tools to aid him in the work of extracting the greatest amount of surplus value from the working class. It is not a question of running an industry but of piling up profits, and the captain sometimes seeks to obtain the lion’s share of these profits.

When industry comes to be organised to meet the needs of everybody without distinction, the various tasks necessary will be distributed and controlled on behalf of all. There will be neither opportunity nor incentive for one to achieve power and wealth at the expense of another, and there will be every inducement for each to give of his best in the way that is most congenial for the benefit of himself and the rest of society.

Kreuger, Hatry, and their like, are really only victims of a society that puts wealth and power among the principal virtues.

Gilmac.