The Common Market Special Survey: 2. The Industrial Power (1962)

From the January 1962 issue of the Socialist Standard

An investment of £2,000 million was the figure recently suggested as necessary for the setting up of an international scientific research centre in Berlin. In the same newspaper the British Electricity Council announced its intention to spend £947 million on generating stations in the next four years. The British Motor Corporation spent £10 million in launching one model—the Austin 7/Miniminor.

In themselves, these three examples have no direct connection with the emergence of the “Common Market.” They are, however, pointers to the scale of modern capitalism. Huge investment and massive production plants are the order of the day. A small sheet steel mill would be economically and technically ridiculous in 1962. Modern plastics, too, such as polythene or nylon, must be produced in vast automatic plants. It is the same story with petrol refining, aircraft production, coal mining, chemicals, shipbuilding, rocket research, and so on; and this matter of size is the real force that has brought the European Economic Community into existence.

E.E.C. is a perfect demonstration of Marx’s statement that capitalism is neither a stable nor a permanent social system. It is driven to expand under the compulsion of inexorable economic laws, gearing up science and engineering to the ever-increasing demands of capital, and forcing human and social relationships into new and arbitrary patterns.

In Europe, particularly, the pressure on national boundaries and sovereignties has been intensifying since the first World War, when Europe started to fall behind America in the race for industrial production and exports. The retention of national units seriously weakened the European capitalists in their struggle for a share of the world’s trade; and since the second World War, which can be seen from one point of view as a German attempt to unite Europe under its rule, it has become obvious that, individually, the European nations are puny and backward by comparison with the American and Russian federations.

E.E.C. is, in fact, very far from being a “good idea ” formulated by European politicians; it is a belated and reluctant acknowledgment of the expanding scale of investment, production and trade.

Steel

Significantly, the first step in the industrial unification of Europe was the setting up of the European Coal and Steel Community in 1952. Coal is still by far the most important industrial fuel, and steel the overwhelmingly dominant metal. Furthermore, the holdings in both industries were already concentrated in a few large blocks, making negotiations relatively simple.

The occupying Allies had limited German steel output to 11m. tons a year. When the restriction was lifted, W. German production rose rapidly to reach 34m. tons in 1960, bringing the total for the Community to 73m. tons. Their exports are co-ordinated in a cartel known as the Brussels Entente handling two-thirds of the world’s steel exports— formidable competition for the British Steel Federation!

Nevertheless, in these boom years for steel, British exports have doubled in the past ten years, and the industry has gone ahead with large development plans at Corby and Margam and Llanwern. A large fraction of this increased capacity is for sheet steel in anticipation of a continued increase in demand from the motor industry. These “strip” mills are barely an economic proposition at under a capacity of a million tons a year. Building a new one is therefore a big step, but unless it strides at this rate the British industry must fall out of the race. The real testing time will come when the boom is over. Then the weight of the Brussels Entente will be decisive.

Unless the British Iron and Steel Federation can break into the European group it can be out-produced and out-priced. Even if it does, the proposed merger between Phoenix and Thyssen in Germany would dominate the group. Indeed, the British steel industry might even be prepared to submit to re-nationalisation in order to wield sufficient power.

Coal

It is a starker version of the same picture with regard to the older and less efficient coal industry. Already a number of Belgian coal mines have been closed down as being uneconomic in competition with German coal. In this country the average rate of profit from coal mining was so low that there was never any real alternative to nationalisation. The National Coal Board, like the true capitalist concern that it is, is to close 15 Scottish pits, involving 5,000 men, next year as part of the attempt to wipe out its £21 million deficit for 1960. It has closed a large number of pits which are unprofitable by modern standards, and the total deficit for Scottish mines is now estimated to have reached £100 million. Contrary to popular belief, the Coal Board does not exist to produce coal, but to produce profits; and so it must cut its losses.

It must do more than this: until now it has been protected from serious foreign competition (even the Steel Company of Wales was prevented from importing cheap American coal); it must reverse the steady shrinkage of exports if it is to survive. They dropped from £61 million in 1950 to £28 million in 1960, largely through uncompetitive prices. By cutting the labour force (by 20,000 in 1961) and by a costly programme of capital investment (£97 million in 1961-2) productivity has been raised from 3-2 tons per manshift in 1950 to over 4-1 tons last year. The National Coal Board claims that it is introducing automatic machinery faster than is being done anywhere else in the world, and that real automation, in the form of robot coal-cutting machinery which seeks out the coal for itself, will be operating in a British mine before the end of 1962. In a Commons debate on the coal industry on October 24th, 1961, the Minister of Power, Mr. Wood, said that: “It was too early for him to forecast the precise effect of membership of the Iron and Steel Community, but it was felt that it would benefit both the NCB and the consumer. This would automatically confer benefit to those working in the industry.” (The Guardian, 25/10/61.)

The attitude of British coal miners towards this statement is not easily available; but, since their numbers have dropped from over 1,000,000 in the 1920’s to 560,000 in 1961, it is doubtful whether they feel so optimistic about Britain’s entry into the “Common Market,” because, whatever else it involves, it certainly means more ruthless exploitation of every man.

Gas

On November 7th, 1961, the Financial Times published a four-page supplement on the Gas Industry, showing that like the National Coal Board its production and sales had risen while its labour force had been cut by 20,000 in ten years. The Chairman of the Gas Council, Sir Henry Jones, wrote of “gas established again as a growth industry” in spite of the fact that the number of gasworks has been cut from 1,050 in 1949 to 378. During this period gas production has remained fairly constant at about 2,200 million therms per annum, which means that the whole industry has been made considerably more profitable under nationalisation.

The fact is that many new possibilities have opened up for the gas industry in recent years. It has maintained its strong links with the coal industry, especially with the introduction of the Lurgi process of complete gasification of coal without leaving coke. In addition, however, it is becoming more and more tightly wedded to the oil companies. Apart from the gasification of heavy fuel oil, such as is being carried out by the South Eastern Gas Board at the Isle of Grain works, American oil companies are offering shipments of cheap liquified petroleum gas and of naptha. The British Gas industry, however, has at present concentrated on its decision to import shipments of natural methane from the Sahara. This touches the question of E.E.C. very closely because the French are reported to be undertaking the construction of a pipeline from Algeria across the Mediterranean to provide gas for a grid-system throughout the E.E.C.

For the British industry one of the main advantages of being linked to such a system would be the ironing out of fluctuations in demand during the day and, to some extent, during the year. France and Germany already have large underground storage facilities for manufactured gas so that summer production may be saved for heavy winter consumption. In one way or another it looks as though the capital invested in the British gas industry could show considerably greater profit and expansion by being linked with Europe.

Electricity

The British Electricity Authority is the most profitable of all the nationalised industries, having made a gross profit of £18 million in 1960-61; but there is further profit to be made by linking itself with the continent to meet future increased demand.

Apart from its own considerable expansion and storage schemes, the Annual Report of the Electricity Council mentioned the fact that “. . . the cross-channel link with Electricité de France would be coming into commission soon. Because of the difference in the incidence of peak demand in the two countries, 160MW of load could be transferred in either direction with savings to both parties.” This is an arrangement which has been carried through independently of negotiations among politicians about E.E.C. and demonstrates that, however British hearts may feel about loss of national sovereignty and all that, the industrial ties with Europe are strengthening every day.

Ample proof of this last point is given in a report from Turin by Gordon Wilkins in The Observer, November 5th, 1961:

“More British cars may have Italian built bodies as a result of discussions held here this week. One leading British body designer told me it may even prove economical to import Italian-made bodyshells into England, especially if Britain joins the Common Market . . . Pininfarina are making the convertible bodies for the new French Peugeot 404. Bertone are sending coupe bodies to Germany for N.S.U. and B.M.W. Vignale, who have been building a Triumph TR3 body for the Italian market, are planning a TR4 coupe for export. The agreement between Rootes and Carrozzeria Touring for assembly of their cars in Italy may be the forerunner of others. . . . Ghia are doing bodies for the Austin-Healey Sprite, and the latest registration figures show how much the British Motor Corporation have gained by having the A40 built under licence by Innocenti.”

In the same way, Alfa Romeo build the Renault Dauphine under licence, while “Italy’s enormous Fiat interests have car-assembly plants in Belgium and Germany, and expansion plans amounting to hundreds of millions of pounds will put them in all six nations” (Readers’ Digest, July, 1961).

In the metal-using industries motor car manufacture today makes by far the greatest use of mass production and costly automation. It is true that a few small specialist firms still persist among the giants; but million-pound firms like Standard have been shown to be too small to remain independent in the mass market amongst the large federations. Their average rate of profit is too low. Only ruthless standardisation and wider and wider markets can make profitable the immense outlay of constant capital. Now, in Europe national tariffs are preventing the giants from coming properly to grips with one another, as they must, for the dividing up of the market; and so they add their weight to the breaking down of these barriers.

A Crisis

Commentators on the emergence of E.E.C. have said repeatedly that industrial companies will have to “think big” to meet the new situation. Like most of the talk in the press and broadcasting, this masks the real picture. They imply that E.E.C. offers new opportunities for expansion. The truth is much more sombre. Certainly, the Common Market began while Europe was still booming; but if there had been unlimited markets for all there would have been no need for a Common Market.

The truth is that the average rate of profit has been steadily falling, owing to the enormous rate of capital accumulation (these huge investments in production plants that have been mentioned); and the European Common Market is not a fraternal gathering but a battle ground. The survivors in this new phase of European capitalism, therefore, will be the ones who are already big.

In the fields dealt with, however—coal, steel, gas, electricity and motor cars— the majority of small competitors have already been ousted in each European country: they are not available to be sacrificed when the competition becomes merciless. As early as October, 1961, the Daily Express, which has always put out propaganda for Empire and against Britain’s overtures to E.E.C., began to make great play of the fact that the current boom in Europe was falling off, insisting that therefore Britain should not join.

But these are precisely the conditions under which Britain will be forced to join, in order to give its giant capitalist undertakings chance to survive by overpowering weaker giants in Europe. Of course, there is no certainty that British capital will come out of it less bruised than its competitors, and this is the reason for all the uncertainty and haggling. The greatest giants of all, the major oil companies and the largest of the steel and chemical firms, can only gain in the long run. But, of course, they are already international organisations. The emergence of the European Economic Community is the political admission of the economic fact that a sufficiently great change in quantity has become a change in quality.

The icy winds of competition occasionally referred to are spoken of lustily as though they are to be a tonic for our health. Members of the working class hearing such windy talk on television ”reports” may even be persuaded that it will be a ”good thing” if some of the industrial “inefficiency” is to be “weeded out.” They can only be thus tempted into forgetting their own position as workers as long as they persist in believing that all this production is carried on in capitalism for the purpose of supplying people’s needs.

The Socialist knows that it is not so. He also knows that whichever capitalists turn out to be the winners in the growing struggle, workers can only expect to suffer in the upheaval and to be more thoroughly exploited in the future, whether they call themselves Britons or “Europeans.”

S. Stafford

Off the rails (1982)

From the August 1982 issue of the Socialist Standard

Like a stillborn child, the National Union of Railwaymcn's strike simply lacked the nutrition to keep it alive. And if it had lived for any time, its strength would have been quickly sapped by some debilitating social viruses.

There was. to begin with, the matter of the NUR’s tradition. Not since 1926 had the union called an indefinite national stoppage; a more usual tactic had been to threaten a strike and enforce a discussion with the Prime Minister of the day, from which both sides would emerge apparent victors and agree to co-operate in an enquiry. But in 1982 the government, far from sending Thatcher to talk with the NUR. is exerting determined pressure on them. British Rail’s stand on the matter of wages was given strength by the government’s refusal to subsidise any concessions at a time when, in pace with the industry’s decline, the railway unions are already in retreat. With the shrinking of steel and engineering, freight carried on the railways has fallen since 1960 from 16 billion tonne miles to 11 billion. Since the railways were nationalised the work force has been cut by about 450,000.

This depression has had its effect on railway workers’ wages; signalmen and shunters have fallen from 13th place among manual workers to 21st. Total earnings of railwaymen are now often below the level at which they qualify for Family Income Supplement. In other words, they are being worked progressively harder for less in terms of real wages, some of them at starvation level. And each negotiation for more pay is surrounded and bedevilled by the employers' demands for more intense work, with the railwaymen condemned as Luddites and worse if they don't immediately accept these conditions.

The NUR’s weakness was personified by its General Secretary Sid Weighell, who is famous for the terrier-like acerbity with which he deals with the other railway unions and with those of his members who are "militants" — which often means that they want to resist any downward pressure on their working conditions. In spite of his confident cry, as the strike began, that "Our case is overwhelming”, it is no secret that Weighell was vastly relieved when the NUR conference accepted what he saw as reality and common sense and decided to take the issue back to the industry’s arbitration machinery.

This did not case the pressure on the railwaymen. British Rail soon announced the withdrawal of their original low offer of a rise and said loftily that it was no concern of theirs if the the NUR chose to go to arbitration; they would not discuss the matter again until the union had given way over “productivity” — more intense exploitation. Tory chairman Cecil Parkinson, in a speech positively rotten with false assumptions and non sequiturs, unblushingly threatened that a patriotism newborn through the Falklands war “. . . will not take lightly the return to the pursuit of self-interest over the national good”. (He was not discussing members of the Stock Exchange, or the royal family at Ascot or the firms which sold all those weapons to Argentina.)

In sober reality, history is not at present on the side of the railway workers. Railways were once part of the romance of Victorian capitalism. Their competition finished off the canals in the late 19th century and for the next 50 years they were integral to the economic and social fabric. "In South Lancashire", wrote M. Robbins (The Railway Age), "people associated the London and North Western with the Church and the Conservatives; the Midland with Chapel and the Liberals”. There were few admitted to be railway workers; those who laboured to produce the profits for the shareholders were referred to as servants of the company and were expected to forego too uncouth a preoccupation with their material welfare for the paternalism of the company. In 1871, when the economy was booming, when unemployment was low and recently passed legislation seemed to put them on a secure footing, the Amalgamated Society of Railway Servants was formed. In theory this was a Friendly Society (its patron was the Earl de la Warr) which did not intend to organise strikes. At the time, a normal working week for a guard could be 90 hours.

The boom collapsed a few years later and from 1876 wages were cut and hours increased. One result of this was the reduction of ASRS membership from 17,000 in 1872 to 6,000 in 1882; another was the formation in 1880 of the Associated Society of Locomotive Engineers and Firemen (ASLEF) and later, in 1889, of the General Railway Workers Union in direct opposition to the ASRS. In most cases the employers refused to recognise or negotiate with the unions; the general manager of the London and North Western told the 1893 Royal Commission on Labour: "You might as well have trade unions in Her Majesty’s Army as have it in the railway service” — an apt comment, in view of the hard conditions and the quasi-military assumptions of employment on the railways.

This attitude was expressed in the action of the Taff Vale Railway Company in 1900. when they sued the ASRS for damages following a strike in which there was some violence. Against all expectations, the company won £23,000 damages from the ASRS — a judgement which struck at the heart of all trade union activity. Every strike has to cause damage somewhere and there is. of course, no parallel provision in the law for unions to claim redress for the effects of a lockout nor for those of a company closing down. The Taff Vale judgement has much to answer for, since it motivated the founding of the Labour Representation Committee, forerunner of the Labour Party and of all those governments which consistently fought the working class and the interests of trade unionists.

The National Union of Railwaymen was formed in 1913 from the combination of three out of the then five unions in the industry. Among the many ironies accompanying the event is the fact that it was hailed as a venture into industrial unionism — the establishment of one trade union to cover an entire industry as a step towards the working class taking over the means of production. Some craft unions remained outside the NUR, as did ASLEF and the Railway Clerks’ Association (now the TSSA). Traditionally (and the railways are a great place for tradition) there is little love lost between ASLEF and the NUR. Sid Weighell recently called the ASLEF president a liar, at which the offended man threatened to pick Weighell up by his braces and drop him down a lift shaft.

During the First World War the importance of the railways to the British capitalist class was asserted when they were taken under state control. The war emergency offered the unions a chance to improve wages, and the railwaymen emerged, in 1918, among the better paid sections of the working class. In 1921 the Railway Act, which effectively ended state control, imposed a measure of government influence by reducing the 120-odd companies into four groups, each with a territorial monopoly and allowing for the government to keep an eye on the rates charged by the railways. A negotiating procedure was defined which was greeted with relief as the end of disputes in the industry, on the mistaken assumption that strikes are caused by the absence of machinery to negotiate the conflicts away. This assumption was soon exposed in the post-war slump, as the new, larger and more powerful companies responded to the fall in traffic by cutting wages, sacking workers and imposing longer hours on those who were left.

This process was cynically called “rationalisation”. Although the unions resisted it there were few strikes and one which was called, just as the first Labour government were taking office in 1924, was doomed because the NUR accepted the lower wages and kept services going against the striking ASLEF men. In 1928 the NUR agreed to a 2½  per cent wage cut. an agreement described by their general secretary as “the best ever made”. He was probably referring to the fact that there was an undertaking to restore the cuts when business got more profitable; but when the unions asked for this, in 1934, they were again resisted by the companies. There was then the growing competition from the road haulage industry, boosted by the experience of it during the war. NUR conference delegates were warned by their secretary, John Marchbank, that if they struck there would be no road stoppage and that many NUR members would be "walking the streets” afterwards — words which might well be used today by Weighell.

The railways were again taken understate control during the Second World War and soon after the NUR's longstanding dream of nationalisation came true. After the years of cuts, sacking, closures and battling against the railway workers, only the politically misinformed would see an unpredictable irony in the hopes which inspired that dream:

Ideologically, public ownership was regarded as the gateway to a new society, in which there would be greater plenty and less hardship for the toiling masses. Materially, the unions and their members. . . hoped that the elimination of profits would bring them higher wages and better working conditions, that State control would ensure full employment . . .

(Nationalised Industry and Public Ownership, W. A. Robson).

In contrast, the reality has been a continuing struggle against the stale machine which had taken over from the private groups. The NUR threatened a strike in 1953. in an effort to improve a low wage offer. A hastily set up Court of Enquiry secured them a much higher offer. In 1958, when the employers rejected a pay claim, a strike was averted by yet another enquiry, which recommended that railway wages should be set by reference to "comparable” jobs in other industries. This was greeted as a “common sense" solution which would eternally remove all conflict. But in 1965 it clashed with the “common sense" of the Wilson government's pay policy, which was to restrict rises to those cases where the workers could prove they were working harder, no matter what was happening in “comparable" industries. There was another threat to strike, averted by Wilson’s personal intervention. The Labour Prime Minister kept the union officials talking on beer and sandwiches (Tory Premier Macmillan had beaten them with tear-swept memories of the Flanders battles of 1914/18) until they all agreed to yet another enquiry which would produce a report to be greeted as an eternal piece of "common sense".

Of course things were different then. Before the present slump, employers were usually prepared to support industrial cooperation at almost any cost. In the present stark climate, the railways’ difficulties have been intensified by the measures of successive governments to isolate them commercially from the rest of the transport industry, with which they were linked by nationalisation. Their lack of direct profitability (a feature of railway networks world wide) can no longer be cushioned by the other parts of a state transport system. Since the early 1960s, most notably under the luxuriantly waged Lord Beeching, the railways have been cut back and the workers’ bargaining power correspondingly undermined.

The plight of the unions, then, is not the making of any feeble, or militant, leaders, nor of transport ministers getting their own back for past concessions. Railways were once dominantly powerful in capitalism and had that sort of glamour. Now they struggle, with the help of Jimmy Savile, against the drab image of the outmoded. None of this has anything to do with their usefulness to people or their material efficiency; it is all judged by their contribution to the overall profitability of British capitalism. By these standards their future looks pretty precarious. This is no time to be playing at trains.

Ivan

50 Years Ago: Work for All (1979)

The 50 Years Ago column from the November 1979 issue of the Socialist Standard

The Sunday Pictorial, October 6th, 1929, gives prominence to an article by Mr. G. Ward Price, who, according to the headlines, “shows that industry is suffering from several definite ailments. If it were “rationalised and brought up to date, we should not have a capable worker unemployed. There is no mystery about what is wrong with the great British export trades,” says Mr. Price. “Their costs of production are too high.”

Further, he says, “There are only two “remedies for unemployment. . . . One is the compulsory rationalisation of our big industries on lines of which America and Germany furnish the example, and the other is the reduction of Trade Union restriction.”

Mr. Price may be guilty of some slight exaggeration when he says the result will be jobs for every capable worker. That fulness of employment has not yet been reached by America or Germany, although, he says, they furnish examples of rationalisation we might copy.

There is no question with the capitalist about reducing unemployment. So far as he is concerned he desires to increase it. If he rationalises his concern he reduces the number of workers employed while increasing the amount of the product. He may not, it is true, reduce the number of workers in his own factory, but workers must be displaced somewhere if he succeeds in capturing markets previously held by his competitors.

[From an article “Work for all” by F. Foan, Socialist Standard November 1929.]

Railway Rationalization and Profits (1932)

From the December 1932 issue of the Socialist Standard

Ten years ago the British Railway Companies were amalgamated into four large groups, with a view (so it was said at the time) to more efficient working, better services, abolition of competition, etc., and greater profits.

During that period we have seen a rationalising process take place which has been of equal intensity with that in many industrial concerns, and the effects of the grouping are now, after ten years, beginning to be only too manifest to the railman and to “the man in the street.”

This policy has been carried out with the usual plausible tales of company poverty and the necessity of working shoulder to shoulder with the employers, as witness Sir Josiah Stamp’s famous letter to the L.M.S. staff, two or three years ago, asking the men to conserve stores and to work hard in this trying time. Also it has been well boosted for some years that traffic was falling and that things were going from bad to worse. This was, of course, “owing to the depression” and to road transport. Many large works, like Newton Heath and Crewe Steel Works and others, have been permanently shut down. Men have been stood off, and reduced in grade, and trains are now made up to greater weights. Various appliances have been brought into use to make men superfluous, and many who have been discharged have given long years of service. Also, last year, a reduction of pay was forced on the wages staff “to help out in this hour of trial.” And now the Companies demand another cut, basing their claim on “the decline of dividends on the ordinary shares”: (Reynolds’, October 23rd, 1932).

It is true that in the last year ordinary stock dividends fell, and that profits are rather lower, but not to the extent the Companies would have us believe. During the last five years, in spite of the depression, the profits have been well maintained until 1931. The following tables, taken from Reynolds’ (October 16th, 23rd and 30th, 1932), show the total dividends paid by three Companies on the various classes of stock in the past five years.

Southern Railway Dividends
(Figures represent thousands of pounds)

	1927	1928	1929	1930	1931
Loan & Deb.	1,754	1,754	1,754	1,753	1,753
Guar. & Pref.	2,501	2,601	2,601	2,676	2,751
Ordinary	2,009	2,009	2,167	1,773	1,103
Total	6,264	6,364	6,542	6,202	5,607

G.W.R. Dividends

	1927	1928	1929	1930	1931
Loan & Deb.	1,549	1,550	1,550	1,550	1,550
Guar. & Pref.	3,348	3,348	3,348	3,348	3,348
Ordinary	2,972	2,123	3,220	2,351	1,288
Total	7,869	7,021	8,118	7,249	6,186

L.N.E.R. Dividends

	1927	1928	1929	1930	1931
Loan & Deb.	3,910	3,985	4,033	4,083	4,255
Guar. & Pref.	7,203	7,203	7,203	7,203	5,129
Ordinary	159	106	1,271	106	0
Total	11,272	11,294	12,507	11,393	9,384

It will be seen that, up to 1929, the profits showed a tendency to increase, but since then, although the dividends on Ordinary shares have fallen, the total distribution of profits was not far short of what it was before that year, and is by no means a slump, and not a bad bill at all for a “period of depression” and “crisis.”

So much for the profits. Now what about the losses due to road competition? The “competition” shows signs of becoming more apparent than real, for all this time, quietly behind the scenes, the Companies have acquired controlling interests in many of the principal road companies, both passenger and goods, and in many cases openly run in alliance with them. Moreover, the rail companies have taken to the road themselves, under their own name and using their own stock in many places. There is obviously no danger of the Companies having to “sell up” just yet. All this propaganda of theirs is largely part of an attempt to force worse conditions on the railway workers.

Arising out of the redundancy of labour comes the cry of compensation for loss of employment and being “degraded.” An inquiry into this and other matters has recently taken place at the Law Courts, and the railway managers stated their attitude to this demand in no uncertain terms. It should be here stated that the companies have “guaranteed” that men who were “permanent” in July, 1931, would not be discharged as a result of the pooling. Sir Josiah Stamp, of the L.M.S., stated at the Law Courts inquiry that “if things improved on the railways, it could be reasonably supposed this guarantee would be enlarged” (Daily Herald, November 3rd, 1932).

But the companies’ advocate, Mr. Bruce Thomas, K.C., was frankly hostile to any further dabbling, and Sir R. Wedgwood, of the L.N.E.R., considered any such thing as “unnecessary and undesirable.” This was to the Union demand for an outside arbitrator re discharges owing to the pool, and Sir W. Jowitt, on behalf of the Unions, summed up the position by saying that the companies wished to be plaintiff and judge at the same time.

But if the Unions gain their point, what then? Have they not had enough of “independent chairmen” and “arbitrators” and “umpires” to know what to expect? Is it not a lot of useless tattle? The only thing certain seems to be 38s. per week for the railman’s basic rate. Why not set about looking for something better? Namely to organise for Socialism, and for society to run its own industries for its own benefit? It will take no more trouble than all this niggling and quibbling. And the result, not 38s. per week and still insecurity, but a system whereby all can lead a happy and care-free existence, surrounded by plenty.

C. V. R.

The Profit-Sharing Snare. Co-partnership Schemes Exposed. (1930)

From the October 1930 issue of the Socialist Standard

The economics of cheapness.

Great Britain is losing her hold over the world market. That means producing firms are finding it harder to compete successfully against producers abroad. Every scheme is being tried to regain lost trade and to increase the quantity of goods sold. Industry to-day is carried on for the profit of the owners, and more trade, therefore, means more profit.

The most effective way to capture markets is to sell cheaper than your rivals. How can goods be sold at a lower price? Modern industry answers—”Reduce the time taken to produce them.” That is how the modern cry of Rationalisation pays tribute to the economics of Karl Marx.

Marx showed that the average amount of time taken under prevailing conditions to produce an article determined its value. So in order to sell cheaper, the manufacturers to-day use every possible method to lessen the time necessary to produce their wares.

Piece-work rates, bonus systems and other profit-sharing-schemes are adopted to arouse the worker to greater effort; to produce quicker; and to save waste. This enables the employer to produce more cheaply, whilst the workers are told they will share in the increased profits.

The “Pace-maker” and his function.

The cotton trade to-day is in decline, and these speeding-up methods are being pushed in Lancashire to enable the employers to ensure their profits. The Manchester Guardian recently had an article suggesting piece-work and bonus systems as a remedy. The fixing of piece-work rates, however, we are told by the writer, is difficult, as it means getting “pace-makers,” or sloggers who can lead the rest by turning out more goods. The standards of price per piece can be fixed more profitably for the employers if really rapid workers are employed as “time setters” to cut down the time required to turn out each job. Thus the Taylor system in all its variations of efficiency is offered as a cure for “Lancashire ills.” Its adoption will certainly raise the employers’ profits, but will simply mean in practice that fewer workers are required to do the same amount of work. Any apparent increase in wages by sharing in the profits is only in actual practice a reduction of wages in relation to the increased amount of work performed. The employer’s share is that his profits are increased vastly. The worker is paid a fraction more than before for turning out a much larger product. The sole result is that the increased efforts of the workers reduce the “share” of the total product given back to the workers as wages. That is why prominent employers are so much in favour of these piece-work and profit sharing systems.

One feature of all these piece price and premium bonus ideas was noted by the Manchester Guardian writer; that is the policy of firms cutting down the piece rate once they find efficiency going up and adding to the workers’ wage. So almost as fast as the workers’ output is increased by slogging, the unit price comes down and the workers are back again to subsistence wages. Once the workers raise output it becomes the average standard for all to comply with in order to get the basic wage.

The Co-partnership fraud. 

Many leading employers have recently boomed another artful dodge to ensnare the workers into working in harmony with the employers. Co-partnership or shareholding by employees is the stale device which is being revived. The Economic League—that body of employers’ friends—issue many leaflets praising co-partnership as the way to social peace and workers’ prosperity.

One of the great examples of this scheme is the South Metropolitan Gas Works, who smashed their employees’ strike on the profit-sharing issue, and afterwards raised hours from 8 to 12 per day. This firm boasts that since “allowing” employees to own shares the efficiency has increased, the price of gas has fallen, and better still— profits have risen considerably. In this firm the profit-sharing scheme was made compulsory, so that all workers would take a “greater interest in their work.” It worked out in practice that fewer men were required to do the same amount of work and the tiny “share” of the workers in dividend at the end of the year proved that the owners had really shared in the added wages due to the workers for their increased efforts and output.

The workers get the "leavings."

Lord Leverhulme, of the Soap Trust, was a great believer in co-partnership. But on his death we found from the published will that he owned the entire two millions of ordinary shares himself. Not much co-partnership there ! And by “allowing” some workers to have special “employees’ shares,” receiving interest after the ordinary shareholders, Lord Leverhulme was able to pile up millions in profit. In his book on the “Six Hour Day,” he points out that he always insisted that the co-partner workers must share in the losses as well as profits. This policy was calculated to teach the workers the importance of helping the firm to make profits.

All co-partnership and similar schemes are put forward to kill any organised efforts by the workers to increase their share of the wealth produced. Under the spell of the “divi.” or bonus, the worker is to be enticed away from the struggle to push up his wages or in any way reduce the employers’ surplus.

The Co-partners get the sack.

Cadbury’s and Rowntree’s are examples of “good” firms with profit-sharing policies. Recent efforts on the part of these companies to hold or increase their trade led them to use more machinery to reduce the labour costs. A reduction of workers employed resulted, and Rowntree appealed through the press for employers to give his superseded men a job. After all the work and efforts of the employees in these firms working hard to produce profits they were replaced by machines ! The co-partners were out of work ! Do you need more evidence of the function of bonus systems and co-partnership ?

The fruits of profit sharing.

In the Ministry of Labour Gazette (July, 1930) appears a complete survey of all profit-sharing and co-partnership schemes operating during 1929. These schemes numbered 495, and were participated in by 260,000 employees out of 531,000 employed in these firms. The report tells us that “in all industries taken together nearly one half of the schemes started have come to an end.” We are also informed that “a considerable number of the schemes admit employees to participation in the profits only to the extent that they are able and willing to deposit savings with the firm or purchase shares.”

A famous firm practising co-partnership is the Eastman Kodak Co. Listen to Mr. George Eastman’s testimony of the profit­ able results to the firm :—

“In 1919 several thousand pounds’ worth of shares were distributed to our employees. One result was that after handing over to the workers one-third of my shares, the value of the remaining holdings soon climbed a third higher than the previous total. That was not the purpose in distributing the shares, but the result shows the business value of the act. Since the shares were distributed the market value has gone up over 150 per cent. Part of this increase in value unquestionably has been due to the wide distribution among workers and officials.”—(Co-partnership, Dec., 1927.)

The Chemical combine.

Sir Alfred Mond (now Lord Melchett) is one of the chief apostles of the co-partnership device. He boasted at the annual meeting of the Imperial Chemical Industries, 1929, that 53,000 employees held shares, totalling about 850,000 shares. (This is about 17 shares each.) They are allowed to buy ordinary shares at market prices less 2/6 per share, and preference shares at the fixed price of 21/6 each. He “trusts” his employees not to sell their shares. Why so many employees put their savings into “their firm’s” shares is easily understood, as it is thought to be a means of being kept on or possibly useful in promotion. How little the workers own in the mighty Imperial Chemical Industries can be seen when it is found that the capital of this combine is over 76 millions. The co-partners have no control over “their” jobs nor any control over the business. What are a few shares owned by each worker against the huge amount owned by such Directors of the firm as Lord Melchett, Lord Birkenhead, Lord Colwyn, Sir Max Muspratt, Henry Mond, Marquess of Reading, Lord Weir, etc. ?

Longer hours for co-partners.

How little Lord Melchett is interested in workers’ conditions can be seen by his efforts in Parliament to get a longer working day for miners. The Amalgamated Anthracite Collieries (owned by Imperial Chemicals) controls 12 coal concerns, and has paid huge dividends in recent years.

Who really owns most of the capital can be seen by its share-list, where dozens of shareholders own 10,000 shares and upwards each, and prominent holders like Guest, Keen & Nettlefolds own £395,000 in shares. Lady Buckland, the well-known miner, owns £395,000 in shares in company with two other aristocrats.

Is this an example of the widespread diffusion of capital that the Economic League and Mond refer to ?

How co-partnership rivets the employees to the firm which holds their “savings” can be seen from Mond’s speech at a co­ partnership luncheon :—

“What is the effect of making them shareholders? We saw some of it in the last General Strike. Not one workman in Brunner, Mond’s left his job ! while many were heard to observe that they did not intend to jeopardise their dividends at the dictates of any outside person. In the business with which I am connected we have been free from Labour disputes for fifty years.”

Lord Melchett is very reticent about the wages paid by his alkali works, mines and every other of the 50 concerns amalgamated into his trust. But the Chemical Workers’ Union are continually protesting’ against the “low” wages paid in that industry practically controlled by the combine.

The workmen co-partners have no control of the share market. Should they want to sell their shares just now what will they get? £1 ordinary shares have fallen from 45/- last year to 19/- to-day. And the 10/- deferred shares have fallen to 5/- each. (Observer, August 3rd, 1930).

The right "spirit" for slaves.

Perhaps there is no better indication of Lord Melchett’s policy than the following- :

“After all, there is no more competitive spirit than that displayed by the British people. If you put them into a football match they will kill themselves every Saturday afternoon for nothing. Why not introduce the same spirit into industry?”—(Co-partnership, Dec., 1927.)

This is from his speech at the same co-partnership luncheon. How tragically true ! that is the spirit of industry—killing themselves for nothing !

Some of the conditions of the Imperial Chemical’s co-partners’ scheme are interesting :

“The scheme is an investment one, and while no absolute restriction is placed upon the workers, they will not be expected to speculate with their shares. The directors reserve the right to refuse to allot further shares to a worker who does not enter into the right spirit of the scheme.

The maximum individual allotment will be such number of shares as can he purchased by an expenditure of a sum not exceeding 20 per cent. of the annual wages or salary of the employee. To this 20 per cent. an additional 1 per cent, for each year of service above five may be added.”—(Co-partnership, Dec., 1927.)

The conditions are, of course, laid down by the firm ! The worker must enter into “the right spirit,” and he must not buy (even if he could afford it) too many shares. Perhaps he might then give up working and, like the real “partners,” live upon profits !

The purpose behind Imperial Chemicals “profit sharing” can be gleaned from the following paragraph : —

“This departure from the normal method of dealing with manual workers is described in the current issue of the Imperial Chemical Industries Magazine as an “experiment,” the continuance of which must depend on its economic result. The creation of the Staff Grade will involve a heavy initial cost which must be balanced by compensating increase of efficiency.—(Co-partnership, Sept., 1928.)

Lion and lamb shall unite!

Another well-known “Co-partnership” firm is the Brush Electrical Engineering Co. The Chairman of that concern, speaking of the results of co-partnership in his firm, says : —

“The scheme also gives us confidence of being able to maintain a fairly satisfactory dividend on the share capital, and it enables us to satisfy our customers that good service deserves a fair and adequate, though not excessive, reward for the shareholders and the staff of workers, both mental and manual.”—(Co-partnership, Sep., 1928.)

The same employer, speaking at the annual meeting of his firm this year, explained some of his principles thus : —

1. Greater economy by elimination of waste.
2. Higher efficiency by elimination of inefficient machinery and methods.
3. Larger output to neutralise low prices by removal of Trade Union restrictions.”—(Co-partnership, June, 1930.)

The last principle is striking, in view of the fact that the supporters of the movement, as the above magazine shows, are prominent Labour leaders, like Citrine, Ben Turner, E. F. Wise, E. L. Poulton (General Secretary of Boot and Shoe Workers). This last leader spoke at the Co-partnership Conference, May 10th, this year, and he served up this slop :—

“If the co-partnership principles are properly adopted, we shall soon get out of the slough in which we find ourselves at the present time.”

The financial steam roller.

One prominent co-partner advocate is Angus Watson, of the Newcastle firm selling Skipper Sardines. His firm was recently bought out by the monster international trust, Unilever, Ltd. Angus Watson resigned as Director, and commented very bitterly on the effects of combination of firms and rationalisation. The worker who had played his part building up the firm’s assets was ruthlessly pushed out by machinery and the power of capital. What can copartnership do in face of the modern International Trust?

Edward Cadbury, the cocoa manufacturer, admits our indictment. Speaking at the Quaker Employers’ Conference :—

“He said they would all agree that the workman ought to have some voice in the management, but at present there was no way in which he could be given any effective control in large scale industry; stressing the words ‘effective control’.”—(Co-partnership, Sept., 1928.)

Reviewing the Life of Lord Leverhulme, by his son, the same paper says :—

“Lord Leverhulme’s ideas did not extend to giving any share of the control to the workers. In his particular case he did not see the reason, and perhaps there was not the demand.”

All the evidence we have produced shows that copartnership and profit-sharing schemes are merely another method of inducing the workers to continue a system in which the real control and ownership is in the hands of the employers and in which all the work must be carried on by the workers.

C.

What Rationalisation Means to the Workers. (1930)

From the July 1930 issue of the Socialist Standard

“The Times” for May 12th and the six following days published a series of articles on “Rationalisation.” The reason put forward for the articles was the failure of English industries to adapt themselves to post-war conditions by increased combination, cutting out the middleman and adopting massed production.

For ten years industries in this country have been faced with a depression that threatens to become permanent. The writers of “The Times” articles have no remedy to offer apart from capturing a larger share in the world market by becoming more efficient than foreign competitors. They instance Germany and America in particular, as countries that have forged ahead of England through adopting rationalisation The four to six million unemployed in America and the growing tide of unemployment in Germany is an immediate reply to them, and also a prophecy of what the future promises to the English worker.

“The Times” editorial defines rationalisation as follows :—

“Brought down to its simplest terms, Rationalisation is nothing more or less than the technique of reducing costs. The first stage of this process consists in the elimination of unnecessary and wasteful competition by the formation of cartels to regulate production and to equate supply with demand, and the combination of producing units in “horizontal” amalgamations. Once this has been successfully accomplished, the way is open for a very large number of economies. Among the more obvious of these sources of saving are the suppression of redundant staffs and middlemen, through centralised buying and selling, the reduction of unnecessary specifications through more adequate standardisation, the closing down of obsolete plant, and the concentration of production on the best-equipped units, which can be kept working continuously on a single type of product, thus avoiding a great deal of wasteful duplication. In the sphere of labour costs tho economies made possible by amalgamation are in some respects even more important. The credit resources of big combines render possible large and frequent renewals of fixed capital and consequently enable the most modern labour-saving devices to be adopted on a scale which is impracticable for smaller units.”

A careful examination of the above quotation will make the fact evident that the essence of rationalisation is the production and distribution of a given quantity of goods by the employment of less labour than is required at present. A proof of this is given in the fourth article, where the writers point out that in the United States, by mass production, the output per man employed is much higher than in this country.

The claim made on behalf of rationalisation is that it will bring back “prosperity” to this country. The hollowness of the claim is exposed by the following quotation, taken from the first article :—

“Taking the world in general, the increase in productive capacity of the basic industries since 1913 has been far greater than growth in the volume of international trade. The various nations of Europe and Asia, to say nothing of the United States, have striven hard to attain a far greater degree of economic self-sufficiency. India, China, and Japan, for instance, have vastly increased their production of cotton goods; Germany has gone far towards replacing the plant which she lost owing to the transfer of Alsace and Lorraine to France; Spain and the countries of Central and Eastern Europe; Brazil and Argentina, not to mention India and Australia, have all been building up manufacturing industries of their own behind tariff barriers. The competition in the export of manufactured goods has consequently grown keener.”

The irony of the situation is that the real cause of the depression, which is now international and promises to be permanent, is the fact that international production has far outgrown the world’s demands. The growth of rationalisation tends to make matters worse. The obvious trend of industrial affairs to-day is towards international combinations and the splitting up of the world’s markets among a few immense combines, which would restrict and accelerate production to meet the demands of the market. This will bring in its train a huge body of permanently unemployed that will become more and more menacing to each capitalist nation, and it will tax the ingenuity of future statesmen pretty heavily to find means to keep this huge body quiet and amused.

That any one nation can secure a large part of the international market for any appreciable length of time against competing nations is now practically impossible. The vast strides made in the rapid gathering and diffusion of technical knowledge puts the leading nations on a level basis and prevents one nation from forging ahead of another. In the earlier days of modern industry, England, for various reasons, obtained a flying start and was for a while the manufacturing nation of the world. But the time has passed by when any nation could emulate England. In the heyday of England’s commercial prosperity, British manufacturers supplied foreign countries with the plant, machinery and technical education which are now being used by them to meet their own productive demands and secure a share of other markets.

The present trouble in India, which the Labour Government are handling in true accord with “the imperishable ideals of British statesmanship,” has its root in the fact that Indian industrialists have become conscious of the commercial importance of their steel, cotton and other industries and want a place in the sun-—or, in other words, a fair share of the plums !

At bottom, then, rationalisation is a move to bring the control of industry internationally into the hands of fewer and fewer people and thereby to tighten the bonds of slavery more closely upon the world’s workers. While on the one hand it aims at easing the present anarchy in production by adjusting supply to effective demand, and also tends to make production more efficient by technical and organisational improvement; on the other hand, it aims at making the worker produce more wealth for less wages and increasing the already huge unemployed army. The chasm between the working class and the capitalist class grows ever greater and greater, and can only be bridged by the abolition of the capitalist order of society—as Karl Marx so clearly pointed out many years ago.

There is an illuminating side to the wholesale movement for rationalisation. For decades the standing reproach flung at the Socialist was the charge that he proposed to abolish the small capitalist—that mythical being who is supposed to have raised himself from the ranks by personal effort and was alleged to be a steadily growing: fraction of the community. He has no place, however, in the rationalised scheme of things, he is to be crushed out—the rationalisers make no bones about it ! And he is to be crushed out because he is a hindrance in modern production. Ethical views do not count where economic interests are at stake. It remains now for the working class to point out to the capitalists that they also have become a hindrance to production, as they cannot organise their system to provide adequately for all members of society.

Gilmac.

A Look Round. (1930)

From the April 1930 issue of the Socialist Standard 

Prosperity in America!

That successor to Samuel Gompers, Mr. Wm. Green (the president of the American Federation of Labour), writes in the Daily Herald (March 8th) on High Wages in U.S.A. Mr. Green gets High Wages, like his fellow Labour Leaders, but doesn’t refer to that. He says that the principles for which they contended in their unions—high wages—is now accepted American practice. But his whole article is a series of admissions of the futility of a ”high wage” policy to assure any security or well-being to workers under Capitalism. Firstly, he tells us how obliging the American workers are :

“In industries where trade unions are an established agency, they have added to protective functions responsibility for helping to solve problems of production such as finding more efficient methods of work, the most economic use of materials, higher quality standards, regularising work and the number of work days. 

Testimony as to the practical value of this kind of co-operation was given to the convention by the president of the Canadian National Railways.”

So not only are the workers exploited, but they assist the employers to find ways to do it better. The “directive ability” of the employer about which we hear so much is assisted by the advice of the workers.

* * *

Where the cotton blooms. 

The Capitalists of the Northern States have found it more profitable to have cotton spun in the South, where it is grown—for there “labour” is cheap. About this Mr. Green says :

“During the past ten years rapid industrialisation of the South has come from textile mills seeking “cheap” labour in our Southern States, which have been slowly overcoming the economic handicaps of civil war between the States in the ’60’s. 

Long hours in mills operating night as well as day shifts and employing child labour also, mill villages controlled by the textile companies and paying low wages, have exploited Southern workers. 

They were driven to revolt last spring by work orders that more than doubled their work but decreased their pay.”

These workers have been left to their “fate” by the American Federation of Labour, who supported Capitalist Politics while all the forces of law and State were used to smash their strike.

* * *

The Scrap Heap

In that “happy land” of rationalised industry—which is the ideal of industrial reformers here—Mr. Green confesses that only young’ workers are wanted.

“Another problem which the convention considered was discrimination against workers over 45 years of age. The speed of machine production is assumed to require young workers. 

This idea, together with protective features which compensation laws, old age pensions or insurance plans provide for wage earners, has developed a prejudice against the middle-aged workers because of additional costs their greater liability is supposed to bring to industry.”

“The speed of machine industry” wants the nimble hands of the young-—hence the future is black while the machine is owned by the employers. The last paragraph quoted above shows that when reforms cost the employers’ money they reduce their liability by sacking those most liable to accident and those who would need to be pensioned.

* * *

Not over 25 years of age.

How quickly workers are used up in modern developed industry is evident from Mr. Green :

“The Federation has collected information which shows that some large corporations refuse to employ workers over 35 years of age, and in some cases as low as 25 years. 

The general trend towards decreasing employment opportunity to middle-aged workers increases the difficulties of providing for incomes for old age. 

In addition we have the problem of workers displaced by machinery and technical changes, so that skills which have been developed through years of work are no longer of any value in production. The resulting so-called technical unemployment is very hard on older workers.”

* * *

What a remedy!

After these remarks on “High Wages” in America, the leader of the American Unions tells us that the remedy for the conditions is to remove them from the area of conflict to the Conference Table ! He also advises the workers to practise “greater output,”

Nearly 30 years ago the American Labour Leaders formed the Civic Federation to get together with Employers “round the table.” And the result can be seen in Mr. Green’s own admissions to-day.

22 per cent. of organised Labour in U.S.A. is unemployed according to the Federation of Labour (Daily Herald, March 4th). What is the unions’ remedy ? More Capitalism. Mr. Ford says high wages are the remedy, but he wants other employers to pay high wages so that their workers can buy his motor-cars. When he announced higher wages for his employees he forgot to add that short time was general in his “shops” and that along with the extra dollar a day a greater speeding up of the machine slaves went on. High wages did not prevent his factories closing down many departments recently and when they re-started the pace was increased.

The land of high wages ! The Secretary of Labour recently complained that 2 million workers were getting 1s. 3d. (30 cents) per hour or less. (New York Telegram).

That means practically a starvation wage in a land with a high cost of living.

But more machinery is coming”!

The New York Post (November 18th) says that machinery in industry, mining and farming has displaced 2,300,000 in the last 8 years in the U.S.A.

The lesson for the workers is to own the machines and produce for use.

* * *

The fruits of rationalisation in Britain. 

“There are 153,000 building workers unemployed.” (Chiozza Money, Daily Herald, February 27th.) 

“There are 200,000 miners who will never work underground again.” (Tom Smith, M.P., of Department of Mines, Daily Herald, February 27th.) 

“Some colliery companies laid it down that when they wanted fresh hands no men over 45 need apply.” (Same speaker.)

We were told that the dilution of labour in the building trade would provide work by making houses cheaper. Now after all the dilution there is vast unemployment. The Labour Party are rationalising mines, closing down uneconomic pits, and combining the others with the result that the 200,000 miners “out of work” will be added to. Rationalisation means efficiency in industry and the older men not wanted as they have been “worked out.”

. . . . . .

By the “aid” of the Banks the shipyards have combined into a huge trust, “National Shipbuilders Security, Ltd.,” and the banks will see that before loans are issued the unnecessary yards and smaller plants are closed down.

Beardmore’s recently dispensed with 600 men on the Clyde at Parkhead as their amalgamation with David Colville, Ltd., made that plant unnecessary. Mr. Brownlie, of the Engineering Union, said :

“I think the shipbuilders are adopting the right policy in dispensing with the obsolete and unnecessary shipyards and reducing overhead and administration charges.”

This capitalist view of a trade union leader quoted in the Daily Herald (March 1st) contrasts with the view from the same paper of the representative of the Shipwrights’ Society, who said, “the scheme was one of the worst things which could happen to the employees.” We are assured by this “Labour” paper that the scheme is largely “a financial one,” which means, of course, a financier’s one. A scheme to assure profits to the detriment of wages and employment.

* * *

More work—fewer men required. 

How true the Socialist view of rationalisation is, can be gathered from the figures given by the Daily Herald—the supporter of rationalisation and the Labour Government. Dealing with the Iron Ore industry in Cumberland, it states that last year was the most productive since the war, output totalling 1,050,000 tons. The next best was 1922 with 868,000 tons. But last year’s output was from 10 mines, while in 1922 it came from 30. “Moreover, the number of employees is half the total of a few years ago. The explanation lies chiefly in the increased use of machinery.” And the “Herald” adds that the volume of unemployment in the industry is very serious, and that the position has worsened since the beginning of the year.

25 per cent. of the Lancashire cotton workers are unemployed and over 5 million spindles are permanently idle, and a large number more are only used on short time. Such are the conditions in the highly developed industry—the backbone of British Export Trade. Now they form a huge combine and fewer mills than ever will be required.

The Labour leaders agreed to a reduction in wages of 1s. 3d. in the £, and the employers argued that a reduction in wages would mean more employment for cotton operatives. After several months of reduced wages they are faced with more unemployment than before.

In the weaving branch the employers are rationalising with a vengeance. Mills are being equipped with “up to date” looms; 8 looms per weaver instead of four. Thus the process of speeding up production means more output by fewer employed, and all the time the output is increased the market for it declines. With a view to using the most efficient machinery continuously the masters are advocating the two shift system as in America, but it has not saved the New England mill workers from unemployment.

. . . . .

We learn from the Daily Express that 120 drivers and Conductors have been dismissed by the London Bus Combine. These men were taken over from the independent companies when the Labour Government’s Traffic Act gave the Combine the control of the London ‘buses. The men were dismissed after medical examination and have no prospect of other employment. The London General Omnibus Company is “fully rationalised ” and Lord Ashfield, the director, sees that when the Company pays its “union wage” he gets the goods. They took over the rival ‘bus company’s ‘buses, but the men were not reckoned to be able to stand the terrific physical and mental strain of working the profit hunting ‘bus of the Combine with its merciless exploitation under “high wages.” So here again—combination of capital plays havoc with the worker. No wonder the Minister of Transport (Mr. Morrison) described his own Government’s bill as one of the worst bills ever passed through Parliament.

Adolph Kohn

The Results of Rationalisation. (1930)

From the February 1930 issue of the Socialist Standard

Karl Marx, in the opening statement of his chapter on “Machinery and Modern Industry” (Capital, Vol. I), quotes John Stuart Mill as follows :—”It is questionable if all the mechanical inventions yet made have lightened the day’s toil of any human being.”

Marx’s retort in a footnote, apart from his scientific analysis of this aspect of Capitalism, is :—

“Mill should have said, ‘Of any human being not fed by other’s labour,’ for without doubt machinery has greatly increased the number of well-to-do idlers.”

Capitalist apologists are never tired of telling us to-day of the blessings and comforts that Capitalism has bestowed—but on whom?

Part of the work of Marx and Engels was devoted to showing that the main object of the introduction and use of machinery was to increase profits. Long before Capitalism it was possible for human labour power to produce more from nature’s materials in a given time than was required to maintain the producers during that time. This gave rise to the surplus wealth upon which all forms of slavery have been founded. These slave societies have varied according to the particular form under which the wealth was produced and appropriated (chattel slavery, serfdom and wage slavery). The latter form is the one with which we are at present concerned; it is one in which the means of production (land, machinery, railways, etc.} take the form of investments of Capital, owned by the Capitalist class. They are the section in society owning property in the means of life, and that possession enables them to buy the labour power of the large remaining propertyless section, the working class. This labour power, the workers’ only asset, when set in motion, produces, as in other slave systems, “a greater value” than it receives in return as wages. With the aid of power, machinery, science, etc., this greater or surplus value has been extended to proportions once undreamed of. The buyers of labour power, the Capitalists, are not concerned with production as such, their concern is primarily with the effective exploitation of the working class for profit.

This term, Capital, is unknown when applied to wealth prior to the present system. Problems that confront the Capitalist class to-day are not those which confronted other ruling-classes. Production cannot proceed uninterrupted unless markets can be found for the products, and, while these products are useless to the Capitalist personally, they contain the surplus or unpaid labour of his workers. The power to produce wealth grows by leaps and bounds, but the power of the workers to consume is limited to the fractional value of their output received as wages.

In this fact lies the secret of the epidemic of over-production, and, finally, of trade depression and stagnation which necessitates restricted output in most of the important industries to-day. Says Marx :—

“The consuming power of the labourers is handicapped partly by the laws of wages, and partly by the fact that it can be exerted only so long as the labourer can be employed at a profit for the Capitalist class. The last cause, of all real crises always remains the poverty and restricted consumption of the masses as compared to the tendency of Capitalist production to develop the productive forces in such a way that only the absolute power of consumption of the entire Society would be their limit.”—(“Capital.” Vol. III. Page 508.)

A favourite method, and one that used to be considered safe in refuting Marx’s teaching regarding the relative worsening of the workers’ conditions, was to look wise and repeat, “Look at America.” Now the Economic League and the I.L.P. will have to construct fresh apologetics with which to defend themselves and with which to meet Socialist arguments. From the very country where we were told that mass output and high wages had banished poverty we now learn from the “Daily News” (14/1/30) in bold headlines that there are “Millions of workers scrapped by machines.” Apparently not even the so-called high wages, nor the prodigal dissipation of wealth by thousands of millionaires, has prevented Capitalism taking the course predicted by Marx. The “Daily News” New York Correspondent says in the same issue :—

“Unemployment in fact, despite the greatest prosperity boom in history, has become as in Great Britain with 1,500,000 workless—the greatest of all national problems.”

This correspondent estimates the unemployed figures at about four millions, but confesses these figures are “merely shots in the dark.”

Previous reports from Capitalist sources (see Socialist Standard, October, 1928) would appear to make it a reasonable assumption that they actually underestimate. The causes of this huge displacement of workers are now, strangely, claimed to be the very things that were previously hailed as the means of American prosperity. They are declared to be “Improvement in machinery; the invention of labour-saving devices; the extension of cheap electric power; the process described in Great Britain under the name of Rationalisation.” The latter is interesting news, especially as the day previous to this report Mr. Ben Tillett was reported in the “Daily Herald” as saying:

“Our textile magnates appear to be either too poor or too inept to realise the virtues of scientific rationalising of industry and the scrapping of all obsolete plants and processes for the greater efficiency which modern methods and equipment arc capable of providing” (“Daily Herald,” 13/1/30).

Practically the whole programme of “Labour and the Nation” aims at the same schemes of Rationalisation, or more efficient organisation of Capitalist production for profit. Without spending time and space on details of argument, any thinking and reasoning reader can see that if America is evidence, then it is not production that is at fault there or here. This fact also rules out such freakish reforms as Birth Control, Family Allowances, or a so-called Living Wage, as relief remedies within a system that reduces its producers to poverty and raises its parasites to millionaires. With a naive innocence that reeks of Nonconformist cant, the same “Daily News” Editorial, commenting on the American situation, says :—

“It is a kind of nonsense to say that a process which makes the world richer must inevitably make thousands of individuals poorer.”

Really ! is it ? Have they never heard of Henry George’s “Progress and Poverty,” Chiozza Money’s “Riches and Poverty,” Chas. Booth’s “Darkest England,” or the statements of Capitalist Prime Ministers like Gladstone, Campbell Bannerman, and Lloyd George? The Capitalist class cannot conceive of any other form of ownership of society’s means of life than the private property basis of modern society. To them, abolition of the present form of wealth, ownership, Capital, means abolition of the means of production themselves.

The “Daily News” unable to explain away the glaring contradictions of Capitalism, increasing poverty, side by side with increasing wealth, refuses to reason and takes refuge in the statement that “it is a kind of nonsense,” They even have to abandon the stock argument that these inconveniences are temporary, for their report says :

“The theory that the workers thrown out of one occupation can find employment in others is not sustained by observation . . . for the first time in history there are indications that this compensatory process may have come to an end and that the trend of modern invention may be to make less work for idle hands instead of more.”

Free-born Britons—note ! Even in the same issue of the paper that considers the co-existent condition of poverty and superabundance, “A kind of nonsense ” we read of 2,000,000 Chinese who have died of famine aggravated by the fuel and transport shortage. Millions of willing and able producers withdrawn from production, transport and transporters who could circle the earth with once undreamt-of rapidity, millions of unemployed willing to produce wealth and yet—famine and poverty. What stark madness ! Such is Capitalism ! No reform that could be introduced will prevent the present system from proceeding according to the laws of its own development. The effects of these laws we have briefly outlined. From the workers’ point of view Capitalism renders all reform futile to solve the main poverty problem. Their conditions worsen faster than the reforms can be introduced and take effect.

The very advocacy of Reform presupposes the continuance of the present system whether those reforms are presented as the sugar-coated pills of the I.L.P. or the frothy catch-phrases of the so-called Communist. It is the Capitalist system itself that enslaves the Worker. The remedy is the removal of the cause and no “meantime” patchwork can do that. Only a Socialist Working-Class will ever be able to undertake the removal of Capitalism and the establishment of common ownership of the means of life. Such ownership will place the powers and the results of production at the disposal of the whole of society; consequently leisure and comfort could be available for all if the Workers had the Knowledge and the desire to bring the change. Until then, through political ignorance, they will continue to keep in existence the present system.

W. E. MacHaffie

“Work for All.” (1929)

From the November 1929 issue of the Socialist Standard

The Sunday Pictorial, October 6th, 1929, gives prominence to an article by Mr. G. Ward Price, who, according to the headlines, “shows that industry is suffering from several definite ailments. If it were “rationalised and brought up to date, we should not have a capable worker unemployed.”

“There is no mystery about what is wrong with the great British export trades,” says Mr. Price. “Their costs of production are too high.”

Further, he says, “There are only two “remedies for unemployment. . . . One is the compulsory rationalisation of our big industries on lines of which America and Germany furnish the example, and the other is the reduction of Trade Union restriction.”

See how great minds work ! The problem of unemployment has baffled each succeeding Government since Governments realised there was unemployment; yet Mr. Price—in his spare time—has placed the whole question—ailment, cause and cure— within the understanding of the least intelligent.

The ailment : cost of production too high. The cause : failure to adopt up-to-date methods, and Trade Union restrictions on output. The cure : limit the latter and rationalise industry.

Mr. Price may be guilty of some slight exaggeration when he says the result will be jobs for every capable worker. That fulness of employment has not yet been reached by America or Germany, although, he says, they furnish examples of rationalisation we might copy.

Every capitalist knows—even if he doesn’t know what his capital is invested in—that reduced cost of production is necessary if markets are to be extended. Every modern concern is run on that basis, even the most backward concerns believe in forcing the biggest return for every penny spent in wages. There is no question with the capitalist about reducing unemployment. So far as he is concerned he desires to increase it. If he rationalises his concern he reduces the number of workers employed while increasing the amount of the product. He may not, it is true, reduce the number of workers in his own factory, but workers must be displaced somewhere if he succeeds in capturing markets previously held by his competitors. For, despite all the bunkum talked and written about new markets, no-one has yet discovered how to unload commodities on some planet across the ether.

Markets are the chief concern of capitalists. Melchett, Ford, and all the rest of the self-advertising industrial magnates are constantly proclaiming industrial warfare against competitors in every country. They carry on the fight by reducing the cost of production ; by reducing the number of workers employed. The huge modern concerns, linked together—often across national boundaries—with the set purpose of achieving world monopoly, organise, train and eliminate until they have the pick of the labour market working at top speed ; with the aid of the latest machinery. An army of workers, trained like athletes to smash, by the cheapness of their products, those concerns opposed to their masters. According to their degree of success the unemployed millions increase. There is no escape from this reasoning. The world’s markets are limited. As a rule what is gained by one concern is lost by others. The markets that are won by England, if we can speak of nations when capital is international, are lost by Germany, France, or some other country.

Mr. Price’s cure for unemployment is, therefore, merely a statement of capitalist method for the benefit of capitalists. It means for the working-class not less unemployment, but more. It means division of the workers into groups and industrial armies straining every nerve to capture world markets for their masters by cheapening their products. Each worker in mad competition with his neighbour to keep his job, and organised on a grand scale to throw men out of work across the seas or the national boundaries.

Trade Union restrictions on output are mere pills for an earthquake, in this collossal industrial struggle. Canute commanding the tides was scarcely more ludicrous than Trade Unionists who imagine they can slow the march of capitalism by going slow themselves.

The working-class forms the great bulk of society. They produce all wealth. Instead of owning the wealth themselves they allow the capitalist class to own and market it. Born and educated in a capitalist world, it is hard for them to conceive of any method of distributing wealth other than by exchange.

The capitalist method is ownership of the means of wealth production by the capitalist class ; enslavement of the working-class by compelling them to sell their energy for wages, and setting them to the production of commodities to be sold on the world’s markets. It is this method, this system, that causes unemployment and poverty, not the high cost of production and Trade Union restrictions, and the only cure is the removal of the cause; the abolition of capitalism.

All workers organised in the mad competitive struggle for markets, as well as the millions of unemployed should learn the truth about capitalism. They should organise with the Socialist Party for its overthrow, and for the establishment of a system where production and distribution will be carried on for the people by the people themselves.

Class ownership of the means of life is the cause of working-class misery. Substitute ownership by the people, production and distribution by the people—leaving out the cash basis—and unemployment will no longer be the name with which we shall designate the long periods when our labour is not required. Modern methods of production can satisfy all our needs and leave us with ample leisure for enjoyment.

F. Foan