Michael Kidron

Profits, Wages & Working Class Tactics

(March 1955)

From Socialist Review, Vol. 4 No. 7, March 1955, pp. 3 & 6.
Transcribed by Ian Birchall, Nina Kidron & Richard Kuper.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.

Nineteen hundred and fifty-four was a boom year for British capitalists: production rose by six per cent above the 1953 figure, profits by ten per cent, dividends by 22 per cent (30 per cent in engineering), share values by 40 per cent (84 per cent in engineering), and exports, both by volume and value, were the highest ever recorded, in spite bf the dock strike. For British workers, however, 1954 was anything but a boom year: while wages rose by four per cent (less than 1s. in the £), prices rose by four per cent as well, and food prices by bight per cent. Real wages were frozen while profits soared.

Nineteen hundred and fifty-five therefore started with wage claims demanded by five million workers, with the greatest trial of strength between the railwaymen and the bosses since 1926, with a conscious struggle on the part of the bosses (British European Airways in London, Standard Motors in Coventry, Wright and Platt’s in Birmingham) to stop the threatened avalanche of wage demands by hitting at its main strength – the shop stewards. Nineteen hundred and fifty-five certainly looks as if it is to see an intensification of the class war. Are our tactics of a wages struggle, pure and simple, sufficient to win? If not, what must be added?

The Lessons of the Rail Settlement

In last month’s Socialist Review, the article on the Rail Settlement came to the following general conclusion:

“Better pay by itself is not enough. Now that industry is so integrated with the State and so ‘centrally planned’ that a concession to the workers here can always be recovered by the Capitalists, many times, over somewhere else, the demand for improved working conditions cannot stand alone. It must be coupled with other, wider demands to form a complete transitional program to Socialism.”

This conclusion is based on the history of the negotiations for a 15 per cent wage increase between the N.U.R. and the B.T.C., but its implications are much deeper and affect the activity of every militant unionist in the country.

Expanding Markets and Real Wage Increases

As long as the capitalist market is expanding, as long as there are potential “consumers ” to be captured by the capitalist productive machine, individual capitalist enterprises compete with one another for the golden goose. The prices charged for their products are relatively fixed by this competition for new buyers: each capitalist has to keep his prices down to the ruling price in the market if he does not want to be “out-priced” arid, as every capitalist is trying to out-price every other in order to get complete, monopoly control of the new markets, prices are kept low. Under such conditions; prices are fixed for the capitalist by competition. The individual firm can do nothing about it – prices are simply there, like the smoke from its chimneys.

If capitalist competition itself puts a ceiling on prices, it is obvious that any increase in wages forced out of the capitalist must come out of profits and can not be passed on to the “consumer” in the form of higher prices or shoddier goods.

What goes for one capitalist applies to all of them. While markets are expanding and labour power scarce, a rise in wages in one sector of the economy creates irresistible pressure on the rest of the capitalists to concede rises to their workers as well, otherwise they would be without a labour force in the long run.

In such a period, wage demands. “pure and simple” can achieve real results in the form of higher living standards. Under such conditions, the militant unionist can be progressive and yet not revolutionary. Those conditions no longer exist, in the main.

Capitalist Stagnation and the Real-Wage Freeze

The beginning of the century put an end to the period of free competition, of the spontaneous growth of markets. Since then, anarchic markets have been replaced by conscious manipulations by monopoly concerns; competition gave way to collusion. The only expanding market was (and is) the war market, which hastened the monopolisation process by strengthening the State and integrating the State with monopoly capitalism: the State now became the greatest customer, the State saw to it that there need be no competition between the Centred of capital in one country, the State regulated wages and kept them clamped under an “official” ceiling.

The first World War announced this change in the internal organisation of Capitalism, the slum of the thirties emphasised it, and the second World War, with its progeny, of local “brushfire wars, took it for granted. Monopoly control and the integration of State and monopoly form the pattern of modern Capitalism.

Now in general, there are no price ceilings for the individual monopolist. If one monopoly raises prices, the others usually follow suit as result of some type of agreement between them.

Last updated on 16 February 2017