Mike Kidron

The Fight for Socialism – 6

(June 1958)

From Socialist Review, 8th Year No. 12, Mid-June 1958, pp. 6–7.
Transcribed by John Rudge.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.

Mike Kidron states the case for Workers’ control

Even Ownership Has Little to Do with Control

The nationalized industries in Britain are supposed to belong to the people of Britain, yet they are obviously controlled by the capitalists of the country. Article 6 of the Russian Constitution reads: “The land, its deposits, waters, mills, factories, mines, railways, water and air transport, banks, means of communication, large state-organized farm enterprises (state farms, machine-tractor stations, etc.) and also the basic housing facilities in cities and industrial localities are state property, that is, the wealth of the people.” (my emphasis – MK) Yet the land, etc., in Russia is controlled by a small, independent bureaucracy. Formal ownership does not necessarily mean control.

Some examples

There are other, more common, examples of this difference between control and ownership. In a big Capitalist firm, there are voting shares and non-voting shares. The non-voters own the firm in exactly the same way as the voters, but only the voters have the right to elect the board of directors, i.e., only the voters control policy. Even then, not all the voters carry any weight in determining policy. A man with a few shares is usually not sufficiently interested in the firm to scrutinize its activities carefully or bother to come to the shareholders’ meetings, while one with a big bloc of shares is. The many small “owners” may work at cross purposes, the big owner has only his interests to look after. Usually, the ownership of about 25 per cent of voting shares is sufficient to give control of the whole company and of all the other Capitalists’ money invested in it. (Sometimes only 5 per cent will do the trick). Control doesn’t always stop there, however. The company may hold 25 per cent of the voting shares in another couple of companies which, in turn, may hold 25 per cent of those in another few companies, and so on. Some companies called “holding companies” are, in fact, specially formed to control shares in this way, so that one group of shareholders, although it really “owns” an insignificant proportion of the total capital involved, might control a vast economic empire.

It is as well to bear these facts in mind when capitalists come out with their beautiful schemes for “co-partnership” in industry. The sense of solidarity with the boss which sometimes accompanies the couple of shares doled out, blinds the worker to the fact that he has no say in running the plant.

If ownership does not necessarily imply control, what is control?

How Do Capitalists Control Industry?

In order to control a firm, the group of Capitalists at its head need know nothing about it. The Manchester Guardian reported an analysis of 725 public companies, comprising about four-fifths of Britain’s engineering output. It showed that over two-thirds of the Directors have no professional qualification and that 40 per cent of the companies’ Boards have no technically qualified Director. Yet in the last 50 years the proportion of chartered engineers to the working population has increased fourfold. One only need add that a large proportion of Company Directors are themselves paid hacks of the really big investors, chosen for their know-how, to see how little Capitalists need know about industry.

The actual running of the firms is in the hands of paid managers and salaried technical staffs who have no say in “policy”. And yet, although all the “know-how” is hired, the control still lies in the hands of the non-professional directors. What is this control?

The Directors have the power of hiring and firing.

Although they know nothing about the actual process of production, they can tell a man who does by his record. If a manager produces a 10 per cent profit when every other company is raking in 20 per cent, that manager gets the sack. If he produces 20 per cent while others produce 10 per cent, every firm competes to employ him. The same goes for the rest of the technical and professional staff – they are hired and fired on the basis of their formal qualifications and on the basis of results which every man in the street can see. Very little training in arithmetic is needed to see the difference between 20 per cent and 10 per cent.

What gives the Capitalists the power to hire and fire their managers? The law courts, police, prisons and the army – the whole apparatus of repression which is the Capitalist State. If the managers should do the impossible and refuse to leave his office, he’d find himself behind bars in no time. If workers should again do what they’ve done so many times before and conduct a sit-down strike, they would find troops banging at the gates within an hour.

Capitalists control industry, not by their superior knowledge, but by their monopoly of armed power (ably abetted by their control of the press, the radio, television, films and the other “idea-fixing” industries).

What Capitalists Can Do, Workers Can Do Better

When the workers take power in Britain, we can expect very little damage in the basic economic facts of the country. True, most industries will be nationalized sooner or later by the Workers’ State. True, the struggle for the Workers’ State will take the form of trades councils, factory and shop committees mobilizing the workers to eject the capitalist owners. But capitalist owners, as the experience of nationalization in Britain and Russia shows, are not absolutely necessary to capitalism. Given State power the technicians, managers and bureaucrats can very easily perform the functions of the capitalist, even better than he can.

Yes, the Workers’ State will inherit very many features of capitalism. Managers and technical experts will remain, and our ignorance, for which we have to thank the capitalist world in which we were brought up and which places the technocrats at such an advantage, will remain with us too. Possibly a whole generation will have to pass before this class difference between mental and manual labour disappears for ever.

How to control the technicians

In the meantime our main job inside the country (ignoring defence from external attack for the moment) will be to guard against the middle-class “technocrats” becoming an independent body with armed powers of their own. This must be done in two ways: the job of hiring and firing technical and managerial experts must be in the hands of elected shop and factory committees with the power of striking against any sabotage or breach of faith on the part of these technocrats. Second, these committees and regional trades councils must have the full support of the Workers’ State. No separate bodies of armed men but the entire people armed.

Given these two conditions, the technocrats will obey the workers as they have always obeyed the capitalists.

Last updated on 16 February 2017