Ted Grant

Britain: director shows the real face of capitalism

Source: Militant, no. 7 (June, 1965) and no.8 (July-August, 1965)
Transcription: Francesco 2010
Proofread: Fred 2010
Markup: Niklas 2010

Part 1

The capitalist class are beginning to step up their pressure on the Labour government, scheming and preparing its downfall. Before doing so they are using the popular press to smear and discredit it. In their own journals, read by “Top People” they are launching the offensive more and more openly. The Times of May 27th in an editorial headed Ebbing confidence pontificates:

“Private industry, including finance and commerce generally, is beginning to lose faith in the government’s promises, even assurances, to give enterprise its head. Some parts of the private sector have already shown their impatience. The City has been restive since last November. The governor of the Bank of England voiced his feelings some months ago. More recently the clearing banks spoke out. So did the building societies. Last weekend Mr George Brown had a ‘misunderstanding’ with the Institute of Directors…”

They conclude:

“Concessions on the Finance Bill (in relation to Corporation Tax and Capital Gains Tax) could be the beginning of a positive government move to work with business and not against it.”

In a smooth and polished way the Times expresses what is said crudely and brutally by the managing directors of the monopolies and big business. But the real purpose is the same. What the ruling class is thinking is best expressed in the speech of the chairman of the board of directors of the Rugby Portland Cement monopoly in his annual report which is proudly and brazenly advertised in the Financial Times and the Times of May 17th. Here is the naked expression of the real motives of the capitalist class in relation to the economy and their attitude towards the working class and the labour movement.

If the leaders of the labour and trade union movement had one tenth the loyalty in representing the interests of the workers as these gentlemen in representing those of their class they would circulate this report in millions of copies, with appropriate comments. Here we can only reprint some of the choicest bits with corresponding analysis. It is to be hoped that readers of the Militant will give them the widest circulation in the labour movement.

Profits up

Sir Halford Reddish starts with the declaration of a 25 percent increase in profits in 1964. This was the nineteenth successive year of record profits—“the largest increase we have so far realized”—and Sir Halford is looking happily forward to a still further increase in 1965.

But alas the trials and tribulations of the stock exchange shareholders are always there. Hidden reserves have had to be brought into the open due to the “stupidity” of the workers in throwing out the Tories.

“In the peculiar circumstances existing this year with the pending introduction of a Capital Gains Tax it was felt to be in the interests of the shareholders…a review…had shown that in the opinion of the Board book values understated current values by not less than £12 million.”

How much sweat and toil of the workers in the industry contributed to that “under-valuation”! The threat, however mild, of having to disgorge some of these gains forced them to reveal these assets.

Capitalism summed up

The speech could sum up the real economic, political, and philosophical conceptions of the ruling class. Marx wrote wittily that the capitalists in their lust for profits would like to drive the workers and the machinery 25 hours a day if they could. A hundred years later Sir Halford repeats seriously what Marx wrote as caricature. “Our plants, are operating continuously and we cannot get more than 24 hours out of the day nor more than seven days out of the week!” This in relation to the problem of increased productivity which he declares is “mainly a matter of management—the most economic deployment of capital and labour.”

Sir Halford and his directors regard the working class as nothing more than a source for the production of their profits, part of the machinery of production. In this, with a certain satisfaction for himself and the shareholders, he says “our production per man hour has been increased in the last 10 years by 22.5 percent”. That is nearly a quarter increase! One can be sure that the wages of the workers did not rise to that extent, or that the price of cement fell correspondingly. On the contrary with a sellers’ market due to the economic upswing since the war, and the demand for factory and office building and houses, both at home and abroad, with a virtual monopoly the price of cement has been maintained artificially high.

Production for profit

The capitalists produce goods for profit and not for any other reason. Sir Halford explains,

“We have abundant confidence in a continued growth in the demand for cement, and are therefore working on plans for a substantial expansion of our productive capacity in the UK…I emphasize that there is no element of expansion for the sake of expansion in these plans. We shall not go ahead with any of them until we can feel assured that they will be economic propositions. This almost certainly will involve some increase in the selling-price of cement in view of the present-day cost of plant and the rise in other costs outside our control.”

No crocodile tears here about the burning need of people to be re-housed, the lower paid workers condemned to live in terrible conditions in the slums, the painful dilemma and unhappiness of newly-married young couples, at what should be one of the happiest periods in their lives, compelled to live with their in-laws under crowded conditions, suited almost perfectly to produce the maximum friction and conflict. The purpose of producing cement is not for housing but for profit. Business is business!

Sir Halford and his directors were looking forward to some happy years. “But the ultimate result of our efforts in 1965 is at present clouded, indeed dominated, by the uncertainties created by the present UK government.” “I said last year that the election of a Labour government embracing Socialism would be a disaster for our country, and so it has proved.” Magnanimously he declares: “I am not one of those who say that the businessmen should withhold all co-operation from a socialist government…” On the contrary he declares that from sheer kindness of heart they should “help them not to do too many things which will damage the nation’s economy.” Unfortunately at this stage, big sections of the labour movement have the illusion that the government can “regulate” the economy by “directives” to business. This has been evidenced in the recent union conferences. The Cabinet and the leaders of the TUC have systematically disseminated this illusion. Sir Halford in his naive way puts his boot on this proposition. Production is for profit and not for some cloudy ideals.

He confirms the arguments of the Marxists when they crucified the so-called “class-less” conception of society put forward by such right-wingers as Crosland, Jay and Roy Jenkins. How fantastic appears the attitude of Callaghan the “socialist” Chancellor who declared he was the Chancellor of “all” the people, not one class, of Brown when he called for collaboration with the employers, of Wilson with his wining and dining and hobnobbing with the representatives of the biggest section of big business. Big business will collaborate only on their terms and in their interests, which are fundamentally opposed to those of the working class and the people generally.

All the cringing and fawning on big business will do no good. What counts with them is £.s.d. [Note: abbreviation for “pounds, shillings and pence”]. In the peculiar capitalist idea of economics Sir Halford waxes lyrical about the importance of “confidence” “between individuals, as between collections of individuals, as between nations.” What Sir Halford means is the need to bow to the interests of Mammon, nationally and internationally, otherwise they will not “co-operate” whether as bankers, merchants or industrialists.

This is made clear in the next section of the report where Sir Halford raves against the modest provisions of the Corporation and Capital Gains Tax.

“If the Finance Bill reaches the Statute Book in anything like its present form it will have a disastrous effect on the national economy.”

Sir Halford then expresses from a capitalist point of view the fact that the profits of the capitalist, (the surplus value extracted from the labour of the working class) is the source for further investment. All this, of course, not for the sordid motive of profits but in the interests of the nation! “The attack on profits [these should be sacred—EG] which is increasingly severe, overlooks the fact that the profit of today [in effect the surplus of production over consumption] is the only source of the much-needed capital of tomorrow.” Even the modest Capital Gains Tax—a tax not much different to a tax which has existed in “free enterprise” America for more than a generation—comes in for the strongest condemnation.

Let workers sacrifice!

But, of course, it is only of the “nation”…in reality the ruling class, of whom Sir Halford is thinking. In his crude way Sir Halford reflects the idea of Marxism that the source of the profits of the capitalists is the unpaid labour of the working class. Trotsky once expressed this idea graphically when he said that the class struggle was the struggle over the share of the workers in the surplus value and surplus products that they produced. Sir Halford and his class want to limit the share of the workers, so that their share can be increased. The wealth of the country has been produced by the labour of the working class for generations. It now amounts to the colossal figure of £100,000 million. Sir Halford is interested in increasing the “capital” of the country only because this means an enormous increase in the privileges, power and income of the ruling class.

For them the State exists to protect and increase this power. Despite the fabulous increase in the wealth of the ruling class, they want the burdens of “consumption” restriction to be borne by the class who produce the wealth. They have reacted violently even to the modest increase in taxes suggested by the tax on capital gains. Sir Halford expresses their point of view:

“In several directions the present proposals amount to a steady confiscation of capital. Theft is still theft even if ‘authorised’ by man-made laws.”

How then would Sir Halford and his class respond to a really radical attack on their vested interests? If there is any theft involved it is the theft by the capitalists of the surplus produced by the workers by productive work.

Part 2

While demanding that the consumption of the workers be reduced, naturally Sir Halford, in common with his class is screaming piteously against the attempt to limit the racket on business expenses. “Yet another burden to be borne by the shareholder is the proposed disallowance for tax purposes of ‘entertainment’ expenses.” With hand on heart Sir Halford virtuously declaims, “I know nothing about the grouse moors, the yachts and the penthouses airily mentioned by the Chancellor, I can speak only for our own company. We have always refused to buy business.” Sir Halford can speak this way, as his firm controls a virtual monopoly; naturally they are not in the position of having to “buy business”. But nevertheless,

“Of course it depends on what is meant by entertainment. I confess that I try to extend the working day, particularly in London, by a business discussion over lunch or dinner (as the Prime Minister himself does) and often over breakfast as well. Quite recently I had visitors to breakfast on three consecutive mornings…On each occasion I paid (that is, in due course the company paid) a few shillings for the other man’s breakfast. Is that ‘entertainment’?”

Directors’ canteens

Sir Halford can sleep easy. His friends, just as they employ people to find ways for tax dodging, have already found a way round this restriction. The Financial Times cynically reports the appearance of “directors’ canteens” where the cost of a meal is anything up to £10 a head. The wages of good chefs in the West End have soared and company directors are making inquiries in Switzerland, France and Germany for top chefs because of the resulting shortage! All this on business expenses of course! A far cry from the miserable meals served in the workers’ canteens. If there is to be any limitation on “consumption” it certainly will not be on the part of Sir Halford and his class.

Sir Halford complains, as do consistently all the capitalists at the “excessive government expenditure”:

“High prices are not the cause of inflation; they are the natural effects as the inexorable law of supply and demand comes into play. If the bath is overflowing it is not much good baling out with the soap-dish. The thing to do is to turn off the tap. And the tap in this case is excessive government expenditure.”

Naturally the high price of cement is a law of nature! It has nothing to do with the monopoly, which has been established by concentration and amalgamation in the industry. What Sir Halford wants is a slashing of expenditure on the social services, education, house building and such “luxuries”. Naturally his class would not want a cut in the arms estimates, which are intended to defend the loot at home and abroad. One has only to remember the howl that went up when it was suggested there should be a cut in the expenditure on aircraft production. Arms production is expensive but highly profitable!

What Sir Halford means is indicated by his contemptuous references to the electorate:

“…it is difficult to imagine any government, whatever its political colour, and much less a Socialist government, resisting the temptation to bribe what is so largely an uninformed electorate, as long as there is universal suffrage.”

The reference to universal suffrage has sinister connotations. So long as the capitalist economy is in the process of capitalist upswing, and so long as the electorate continues to vote Conservative, with only occasional regrettable lapses in voting Labour, and so long as the Labour leaders do not launch really radical measures against capitalism, the capitalists are prepared to tolerate the continuance of democratic institutions. While they are making record profits they are prepared to tolerate this inconvenience. But as the impatience of Sir Halford indicates, despite this, any attempt to take serious measures against capitalism would provoke their implacable resistance. Like the German, French, Italian and Spanish capitalists before the war, they would turn to other means to maintain their domination. In Britain too, before the war big sections were preparing to back Mosley.

Representatives of the capitalists like the opposition leader and “civilised gentlemen” like Home and Enoch Powell, not to speak of Sir Cyril Osborne, can use in however surreptitious a fashion racial prejudice, in their attitude to immigration, for the purpose of gaining support and misleading the working class even at the present time. What base and dirty methods of repression would this class stoop to if they felt their position really threatened? If they react in this way to not a diminution but a limitation of their profits one can imagine the rage and the hysteria with which they would greet any real threat to the sources of their wealth and income.

Incomes policy

So far as the ruling class is concerned the incomes and prices policy of the government is already dead. The Financial Times cynically explained the real purpose of the policy as the restraining and limiting of the increase in wages of the workers. With full employment the workers had a sellers’ market for their labour and only by such means could the rise in wages be restrained. The capitalists, as already explained, were not interested in either limiting their profits or incomes. Thus the crime of the Labour government not only lies in trying to check the super-profits being made by the capitalists but being unable to restrain sufficiently the attempts of the workers to gain increases to match the increases in the cost of living and a small increase in their share of the wealth they are producing. As Sir Halford explains,

“The much publicised incomes policy is in my view an unrealistic conception and in any case has been shot to pieces by the large wage increases granted during the last six months. Our so-called full employment really conceals much under-employment, with far too many cases of two or three men doing work which could and should be done by one man. A little more work all round and less talk of leisure and our export problem would soon be solved.”

Sack three million

There speaks the brutal voice of capitalist reaction. Sack three million workers at least, and discipline the rest with fear of the sack. Speed up the intensity of the work and lengthen the hours, then “we” i.e. the owners of industry, would be able to compete with our rivals, and of course, increase our share of the swag. There’s only one trouble with this pleasant solution to the problems of the capitalists…the working class in Britain would not stand for it! Every time there has been an attempt at mass dismissals, the workers have demanded alternative work for their mates, brothers and fathers, or have responded with determined strike action. Not yet with their backs to the wall the employers have seen that at this stage it would cost them more than it was worth in mass strikes and social unrest. But what they really think is blurted out in this unadorned statement.

Sir Halford does find words of praise for one Labour minister. No trade unionist would be given a prize for guessing his name.

“I applaud the present Minister of Labour for his courageous call for more discipline in industry and for ‘an honest day’s work for an honest day’s pay’, for his outright condemnation of ‘unofficial’ strikes and flagrant breaches of contract. Without sanctity of contract, the honouring of agreements freely negotiated, the whole fabric of our civilisation must sooner or later fall apart.”

“Bed of nails”

Words of praise from this enemy of the labour movement are sufficient condemnation of the role which has been played by Gunter, since he became Minister of Labour. Gunter intends the working class to be pushed onto his “bed of nails.”

The government staggers on from one expedient to another. All the forces of capitalism are exerting pressure upon it. Their senior partner in the “Alliance”, American imperialism, joins with the ruling class in demanding cuts in “consumption” and “government expenditure”. But together with the ruling class they implacably reject any question of a reduction in defence spending. The bowl that went up over the modest increase in taxes represented by the Finance Bill shows where they consider the taxes must be directed. They are not satisfied with Wilson’s boast that consumption had been cut by £500 million through the taxes on beer, cigarettes and income tax introduced by the Budget. They demand further attacks on working class standards.

What remains of the practical realistic programme of working hand in hand with big business? It is not the hand that big business wants but to grab Labour by the throat.

Thus the measures of the Labour government cannot satisfy the working class, nor placate their enemies. How could it be otherwise? With 20 percent of the economy only under state ownership, it is the more productive and profitable 80 percent of industry that calls the tune. This is the insolent taunt of the Institute of Directors, in their campaign against the Labour government. Sir Halford Reddish has spoken for his class.

End compromise

The workers in the labour movement will have a different reaction. The Incomes Policy must be ended. Let there be real and drastic measures against the 400 monopolies, the private banks, insurance companies and the landowners. If anybody’s income is to be limited let it be theirs!

Take the economy from out of the hands of this parasitic clique by nationalising this vital section of the economy! Let the Labour leaders cease cringing before the Halfords of this country and abroad. Let them mobilise and rely on the power of the working class in the labour movement and in industry and the situation would soon be transformed. Plan industry under the democratic control and management of the trade union movement and the shop stewards.

Attempting to compromise with the capitalist class only ends in compromising the labour movement. It demoralises the workers and throws the politically backward layers of the workers and the middle class into the hands of the Tories. Big business is moaning about “socialism”. Give them a real taste of socialist measures, so that they can have something genuine to moan about!