From International Socialism (1st series), No.29, Summer 1967, pp.23-25.
Thanks to Ted Crawford & the late Will Fancy.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
John Hughes does not consider the crucial issue. Can a Labour Government, working within the capitalist system, operate a socialist incomes policy? If it can, then it remains to be proven. If it can’t, then John Hughes has based his economic policies on a myth. It is no answer for him to point to this or that socialist idea he has incorporated within this fallacious framework. Indeed, the fact that his position contains progressive features within a generally unprogressive stance only makes matters worse. A Pied Piper with attractive tunes is the most dangerous. John Hughes accuses me of misrepresentation. He denies giving succour to the Right-wing and challenges me to furnish quotations to prove it. But the charge is not based upon any particular passage. It comes from a consideration of the objective role played by advocates of incomes policies. Since the idea was first mooted, their general effect on the Labour Movement has been debilitating. In the early ‘fifties, the main debate was about public ownership. The Left contended it was an essential and integral part of any socialist programme, that society could only be transformed after the commanding heights had been wrested from the capitalist class. But the Right regarded this as an old-fashioned, fundamentalist approach. Socialism was, to them, a question of equality; ownership remained irrelevant.  It was in this political context that Alexander and Hughes wrote their wages plan pamphlet, thus making it possible for the faint-hearted, weary of putting the case for public ownership to unreceptive audiences, to espouse the same ideals as Crosland, while doing nothing to challenge capitalist society.
Subsequently, the Left supporters of an incomes policy – they might be termed the Tribune school of economists – gave the impression that the great day would dawn when Harold Wilson entered Number 10. One can scour the pre-1964 writings of Hughes and the others without finding a single warning that a Labour Government’s incomes policy might make trade unionists its main target. Their efforts were, in part, responsible for creating a favourable climate for the Government, where workers accepted measures far more damaging than those of Selwyn Lloyd.
Whereas International Socialism advocates the creation of shop stewards’ defence committees to counter the policies of the Labour Government, Hughes is proud to sit on a Labour committee formulating policy. His recent Fabian pamphlet, An Economic Strategy for Labour, reads as if it was specially written for the Chancellor of the Exchequer as an alternative to the brief he received from the Treasury. This is sound, practical work – given one assumption: that the crisis of British capitalism is superficial. In which case, it may be resolved by a brilliant bit of furniture-moving. But if it is thoroughgoing then it will require more than a few bright moves by the boys at the top. A tremendous struggle, the mobilisation of class forces, will be necessary before the garbage can be swept away.
All Hughes’s writings show, he has no conception of what this will involve. In his current article, he talks about the need to extend workers’ rights by statute – that is, by the capitalist State! Most workers are painfully aware that rights are only acquired through struggle, the chief adversary now being the capitalist State. Then, he mentions that the Labour Party study group, of which he was a member, recommends ‘a measure of workers’ participation.’ A measure? Either the workers control or they don’t. If they don’t control, to sit on the board of management can only involve them in administering capitalist industrial relations – sackings, speed-ups, etc. – over which they have no effective control. This type of industrial set-up, similar to co-determination in conservative Western Germany, has nothing in common with Socialism. It is simply an astute move to embroil trade-union leaders in the working of capitalism and thus divorce them even further from their rank and file. If this can be done under the guise of industrial democracy, then this is just a further dividend.
What is painfully apparent from all Hughes’s writings is that he does not understand the role of many of the present leaders of the Labour movement. No more the heroic days when they led in class struggles, now they are there to keep their membership quiet. In industrial strife, they help to restore normal capitalist relations. Remarks which workers would not tolerate from employers’ representatives can be made acceptable by these ‘labour lieutenants of the capitalist class.’ The present trend is towards State capitalism. The State increasingly regulates, controls and supervises the economy. It strives to centralize decision-making, to strip shop stewards of whatever power they possess. Workers’ initiative – a threat to the system – is inhibited by long-term contracts, which regulate wages and production. All this may appear progressive to those nurtured on Stalinism or the Fabian Society where State control means Socialism. Yet, in reality, these moves strengthen the status quo: Socialism must be democratic, the energy and direction must come from below. By contrast, these moves are, at best, democratic in form only: workers are manipulated, things are supposed to be done on their behalf, whereas in fact the whole exercise is to preserve the rule of a few. Hughes raises the question of whether big business would resist a Labour government’s steps towards Socialism. The whole question is too hypothetical: you don’t fall out with your shadow. The two have become so close to one another, organisationally through joint boards of government and industry, and politically through a common perspective of ‘growth without radical reform,’ that serious disagreement is conceivable. As for expecting the Labour leaders to introduce Socialism, there is a greater chance of them all being converted to Seventh Day Adventism.
The situation in the steel industry clearly illustrates the change wrought in the relations between social democracy and capital in recent years. In his admirable pamphlet Hughes describes the resistance, tantamount to industrial sabotage, used against the Labour Government’s nationalisation bill from 1949 to 1951. But the same thing has not happened again. Why? Lord Melchett, a steel baron, symbolises the difference. Instead of sabotaging the industry, this time he controls it. He is chairman of the National Steel Corporation. On 21 January, the Sunday Express reported that he was actually dictating the salaries to be received by himself and other members of the board. The following week Tribune made anguished noises about this application of the Government’s incomes policy. All in vain! The Tribunite MPs were powerless to do anything about it. For, as The Observer (29 January 1967) stated, ‘during all the long hours devoted to the Steel Bill, MPs never once discussed how the steel industry is going to be run under State ownership. This, in the view of many MPs, quite crucial issue was not being discussed in the House of Commons, but by Lord Melchett’s re-organisation committee meeting among the splendours of Lord Bearsted’s Upton House in Oxfordshire.’ There was no resistance from the steel barons this time because, on the whole structure of the organisation and its method of working, the Wilson Administration accepted their demands. As for the rest of capitalist industry, it stands to benefit from a rationalisation of steel production, the economies of scale, that might help to push up profit margins. For John Hughes, there are personal lessons in current steel nationalisation: instead of talking to the Scunthorpe lads about the Labour Government’s plans for extending industrial democracy, he would be better advised to discuss the whittling away of parliamentary democracy by the Labour Government. John Hughes challenges me to say how I would recommend steelworkers to deal with the problems confronting them. Without a detailed knowledge of the industry, it is impertinent of me to make concrete proposals but I would lay down three guidelines:
- First, State capitalism’s control of the industry will not make it any less ugly than it is under monopoly capitalism. Indeed, the direct intervention of the government in its affairs will increase workers’ difficulties.
- Second, all types of incomes policy must be opposed in the absence of a transformation of society. Likewise with long-term contracts. At best such agreements reflect the class relationship of forces at a given moment in time. If we live in a period of growing class consciousness, a better bargain could be struck in the future. So why restrict manoeuvrability? This is better than increases on the instalment plan, which are almost sure to be stopped somewhere along the line by Selwyn Lloyd and Harold Wilson freezes.
- Third, the crucial aim is to build strong rank-and-file organisation. There are likely to be clashes between the trade union bureaucracy and unofficial committees and unofficial strikers. But such organisation undoubtedly pays off. Here I would refer them to an excellent analysis by Hughes of the effects of militant activity in the coal-mines in the 1950s. I do not know how he reconciles this article with his support for an hierarchically-run incomes policy. Nevertheless, here are Hughes’ conclusions: ‘Comparing 1959 with 1951, four strike-prone coalfields showed the biggest percentage increase in real earnings per shift (Scotland +31 per cent; North-east +26 per cent; North-west +25 per cent; South-west +23 per cent).’
After showing that these increases bore no relationship to profitability or greater productivity, both of which were higher in other coalfields, Hughes correctly draws the conclusion: ‘in the 1950s local and unofficial strikes, wrested improved earnings that the machinery of conciliation and arbitration was unlikely to have conceded without such pressure.’  Historically, the mines provide another useful lesson: a healthy and vigorous working-class organisation cannot exist without struggle. In the 1870s, after the collapse of a hard-fought strike, the coalowners imposed on the Welsh miners a sliding scale. This related wages to the price of coal. It also bore a certain resemblance to present-day incomes policy: decisions were automatically taken at the top by the leaders of both sides of industry; the ordinary collier was given no scope for initiative. As a result, the union leaders ‘became very largely a servant of two masters,’ as Professor Jevons observed.  Moreover, union organisation, since it had no function, began to atrophy. Page Arnot, the NUM official historian, comments, ‘Under these conditions effective trade unionism in South Wales disappeared.’  So the miners provide us with both sides of the coin: struggle is good; absence of struggle is bad. The well-being of the class depends on self activity and self expression. As it grows in power, it becomes more confident and develops a healthy contempt for the Jones’, both Aubrey and Jack.
1. Strange as it may now seem, in those days Anthony Crosland was an arch-advocate of equality. See his Future of Socialism, where he says that equality is ‘the most characteristic feature of socialist thought today’ (p.77).
2. J. Hughes, The Rise of the Militants, Trade Union Affairs, Winter 1960-61, pp.54-55.
3. H.S. Jevons, The British Coal Industry, p.364.
4. R. Page Arnot, The Miners, Vol.1, p.61.
Last updated: 6 May 2010