Chris Harman

Dialectically speaking

Marketing fantasy

(October 1988)

From Socialist Worker Review, No.113, October 1988, p.9.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.

“MR WALESA”, an Independent editorial claimed in mid September, is under pressure from “a volatile younger generation hostile to socialism and eager to enjoy the fruits of free enterprise.”

Fortunately, the Independent was not completely right. Although there has been a drift to the right within the Polish opposition in recent years, one of the most active groupings in the recent wave of strikes was the left of the recently formed Polish Socialist Party.

When we visited the country just after the August strikes, one of them outlined the arguments they used.

“A group of miners asked us why we used the red flag, when it was a symbol of the regime. We replied, ‘The regime has stolen everything from you: the factories, what you produce, your rights as workers. And it has stolen the Red Flag as well.’ ‘But why should we bother about the colour of the flag?’ ‘Because it is stained with your blood.’”

However, there is a small element of truth in the Independent’s claim. Almost everyone we argued with, including Socialist Party members, believed the Polish system was quite different from, and inferior to, Western capitalism. In Poland, they claimed, all production was wasteful, nothing worked, and only the market could solve that.

Again and again we spoke of the inherent waste of capitalism, the modern steel plants that stand idle, the railway stations that catch fire and the ferries that sink.

So it has been with a feeling of vindication that I have been devouring David Halberstam’s new book on the American and Japanese car industries, The Reckoning.

The picture the book paints is very different from the image preached by the official ideologists of the West, accepted by so many of the dissidents of the East – of dynamic, innovative firms, concerned with tailoring production to consumers’ needs and eliminating shopfloor waste. On the contrary, the great American corporations, coasted along for decades.

Henry Ford made his name by the production of the first mass produced car, the Model T, and then resisted all attempts to replace it until his company was beginning to lose money in the late 1920s. It was another 15 years before his successor, Henry Ford II, broke the conservative opposition to innovation in the corporation. But within a few years he was slipping back into his grandfather’s ways.

Halberstam concentrates on Ford. But the picture was the same in the two other great car companies, General Motors and Chrysler. For years they resisted the high compression engine, disc brakes, radial tyres, front wheel drive and fuel injection.

“Detroit – was a place of people who had made their way up taking as few risks as possible ... Innovation cost money and entailed risk, and they had little stomach for it.”

Nor was the internal management structure anything like the perfectly tuned mechanism of the market mythologists. Halberstam describes the skills needed to prosper inside Ford as being “political”.

Under Henry Ford I the politics were very much those of a mini totalitarian state – he had absolute control and no one was allowed to cross his path. His old age was a Brezhnev type period, in which real power was increasingly in the hands of the thugs of his security department.

Under Henry Ford II there was a degree of “pluralism”, with rival “factions” battling for the ear of the great man. This factionalism led to a situation where no one really knew what the resources of the company were. For the plant managers were continually hiding things from their rivals – and superiors – in finance.

“The inner world of the plant managers was filled with secrets, and the name of the game was screw Detroit ... The managers felt themselves buffeted by ever more frequent directions from Detroit ... So they learned to cheat Detroit to preserve the integrity of their own operation ... Were there too many parts left over at the end of a model’s life? They dumped thousands of useless parts in the nearby Delaware River. Detroit loved how little waste there was, how well the numbers matched out.”

When a way of speeding up the line was discovered,

“All this extra production was kept secret, not only from the union but from Detroit. It was all for some rainy day when Detroit came down with some impossible production quota ...”

The Japanese companies, as relative late starters in the world market, could only survive if they were more innovative and dynamic than their US rivals. Yet their internal organisation was still very different to the market mythology. They were strongly integrated into Japan’s state bureaucracy (General MacArthur once described Japan as “private socialism”), and success in a managerial career depended on playing company politics.

What is more, as the Japanese companies themselves achieve a pre-eminent world position, they will inevitably come to share many of the “non-competitive” features of the US giants – relying on domination of markets to ensure continued leadership without bothering with innovation.

As Marx pointed out 120 years ago, competition inevitably begets monopoly. The young, dynamic firms of capitalism’s youth inevitably give rise to the flabby, lethargic giants of its old age. And once that occurs, you find in any capitalist firm many of the features that the Eastern European dissidents believe are unique to the economies they live in.

Last updated on 15 April 2010