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Ken Coates

Incomes Policy and Class Power

(Autumn 1966)

From International Socialism (1st series), No.26, Autumn 1966, pp.19-21.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

The two items, by Paul Derrick and Colin Barker, which you published in your last issue, were most interesting. The booklet, Incomes Policy, Legislation and Shop Stewards, around which the discussion between Barker and Derrick turns, is a most useful exposé, which will prove invaluable to militant trade unionists in coming to grips with most of the essential arguments of the Government, and which deserves a mass audience. Certainly nothing I say will detract from this assessment: I believe that the book represents a considerable achievement for the comrades who wrote, produced and distributed it, and will produce a positive reaction from the workers who read it. Since the publication of the discussion articles by Derrick and Barker, the crisis of sterling has risen to a new high temperature, and the harassed surgeons of Mr Wilson’s administration, after haggling in a most unseemly way about whether to amputate limbs or inject large doses of sedatives, have decided to stop pretending about ‘planned growth,’ and retrench. Six million workers have entered a freeze of claims which had already been acceded to them, and sweeping general cuts, backed by serious legal sanctions, have been imposed in the worst deflationary attack to be mounted by any British Government since the war. The reaction will be swingeing: the significant split which opened up in the Cabinet with the Cousins resignation will form a channel up through which discontent will seethe; the TUC will be rent by fierce internal polemics; and if there were any seriously organised, coherent socialist movement on hand, the battles which will now open up could prove to be universities capable of producing a whole new cadre of socialist graduates in the unions.

The assumption that frontal struggles between capital and labour are necessarily attendant on overall crashes, slumps of the traditional pattern, is one which has befogged socialist thinking for a long time. The present conjunctural crisis has produced far more vigorous retrenchment, and has hit the working class far harder, than the Belgian Loi Unique of 1960-61, which, it will be remembered, triggered off a national general strike. Without predicting a similar reaction in this country, it does seem fair to suggest that there could be very fierce struggles. A fact which needs to be borne in mind constantly is that relatively small downward turns in the living standards of the working people can, in the climate of neo-capitalism, produce sharply combative responses. The alienation, which is deeply felt by masses of ostensibly ‘conservative’ workers, as they experience the numbing taste of consecutive years of neo-capitalist control, in which the system, far from apparent collapse, appears to be at its most efficient ‘best,’ can be transmuted into discontent, even into conscious rejection of the capitalist order, by relatively .small adversities, if these are joined with the perception of real alternatives. The last, and much less stringent, pay pause of Selwyn Lloyd, in 1961, produced a political answer to the problem of trade union containment. The swing to Labour mounted month by month, with a high point reached in early 1963, as the dole queues began to stretch somewhat over the half-million mark. Now, there is no obvious place to swing to. No alternative political force has grouped outside the Labour Party, and none is likely to do so. The result can only be a fierce intensification of the internal stresses in the Labour Movement. For these reasons, Paul Derrick is right to seek to find clearly defined political answers to the crisis, which place the transition to socialism on today’s agenda.

But many of Colin Barker’s points of rebuttal carry considerable weight. I should like to sketch out what I consider to be the synthesis of their arguments. This turns entirely on the question of what have traditionally been described as ‘transitional’ demands: demands which are not limited to the purely reforming level of a minimum programme, but which are, equally, not maximal prescriptions. The transitional demands which are necessary today must serve the purpose of revealing the practical, immediate possibility of socialist options, and the impossibility of any alternative course capable of avoiding wholesale onslaughts on the powers and the standards of life of the working population.

In Western Europe, by far the most general transitional formula of the past decade has been the call for ‘anti-capitalist structural reforms.’ This originated in the Left-wing of the Belgian socialist trade unions, and has been widely taken up, especially in Italy. Of course, like all transitional formulae, this call presents certain dangers: neo-capitalist rationalisation makes many serious demands for structural upheavals in old economic arrangements, and such rationalisations as the Beeching Plan to emasculate the railways, or the Robens decimation of the mining industry, are, in the abstract, quite capable of being coupled with other items of surgery, which might not exclude, for instance, the nationalisation of North Sea Gas, or the re-nationalisation of Road Haulage. (Unlikely as these measures are under the Wilson regime, it cannot be excluded that a modernising technocratic government might embrace them, and, of course, far from their constituting part of an advance to socialism, they could be additional burdens for the working class to bear.) There is, however, a simple answer to this dilemma: the campaign for structural reforms, like all transitional demands, must be seen essentially not as a demand for modification of the economy as such, but as a lever to move consciousness among the working population. This means that the question of transfers of power must lie at the centre of all such demands, and that they must be so constructed as to avoid the assimilation of working-class organisations into an alien power-structure.

Obviously, the current campaign for workers’ control quite clearly fits into such a strategy. Control, or supervision, superintendence, is a relationship between one human party and another. For this reason I use the term quite distinctly from that of workers’ management, which pertains in a socialised economy, in which private ownership has been eliminated. Control can be ‘encroached’ in the style of the old guild socialists: it is wrested, blow by blow, from reluctant and aggressive managements, every time that shop stewards gain control over hiring and firing, or limit the speeds of machines. No magic walls exist to limit this power of encroachment, but a number of physical ones exist: to wit, the frontiers between factories and industries, which have to a considerable extent been reinforced, during the past decade and a half, by the accession of strength to the shop stewards’ movement which came with the acceleration of wage drift and the decline of effective central control in some important unions.

It is at this point that the capitalist strategy of incomes policy can misfire: by forcing the workers to think, not in terms of profit and wages at plant level, or industry level, but in global, political terms, about the national sectors of wages and profits, neo-capitalism engenders an important forward movement in their thinking. It can force the development of class, as opposed to segmental, opposition.

Paul Derrick, then, is right, when he insists that workers should demand that controls should apply to all incomes: yet Colin Barker is right to assume that this is not a practical demand, since it applies to capital a medicine which was designed only for wages. But from there on, Colin Barker errs: he says that if this is an impractical one, it is Utopian and misleading to advocate it. This need not be true, although it can be, and usually is. When I was first grappling with this problem, two years ago, I formulated it in the same way as Paul Derrick. I now consider this to have been wrong, and to have earned the reproaches which Colin Barker and others showered upon it. But the reproaches put out a useful baby with all the bathwater: and the sense in Paul Derrick’s proposal can easily be seen if we formulate it in this manner: ‘Until controls apply to all incomes in the same way, and until we have effective means of verifying that they do, we cannot participate in your plans for incomes policy in any way.’ This is no longer impractical. It says, ‘we will talk about what sorts of policy we want, when only you give us the same powers over capital that it presently has over us.’ In the event of the powers not being forthcoming, no talks, no incomes policy. In the event of the powers arriving, if not in Colin Barker’s vision, Utopia, at any rate, dual power. If the books are open over all the territory of capital, then workers may not only negotiate their own rewards up, but they can also negotiate their employers’ down. The employers understand this, as does the Government, and this accounts for its reluctance to embrace this very moderate measure. Until this year, this central argument was largely untested. But in the course of the very first major battle which was triggered off by the Incomes Policy, it was triumphantly vindicated. After beer at number ten Downing Street and cakes made by Mary herself had failed to entice the Seamen back to work, Mr Wilson appointed the Pearson Committee to investigate the dispute. This distinguished itself by producing its findings without taking’any steps at all to investigate the ability of the shipowners to pay. After the Union’s National Staff had failed to rebut Pearson, a group of militants in Hull took on the task themselves. Here is how they presented the demand:

Much has been made, in the Press, in die Inquiry, and elsewhere, of the supposed low levels of profits in shipping. No-one has seriously attempted to substantiate this; the seamen and the labour movement are expected to take all this on trust. Why this should be considered a reasonable thing to do, when the basis of the owners position is that they can’t afford to pay, is hard to understand. Is it so unreasonable to DEMAND as we do, and as of right, that a full scale Inquiry into shipping ownership and profits be carried out? The owners know all about our wages; we know very little about their profits. We are constantly hearing the figure of 3% quoted as the sort of return which the owners get on their capital. The Government has “accepted” that the owners have nothing to give away ...

The tie up with banking is particularly significant, since, as is well known, banking companies are allowed to maintain, perfectly legally, hidden reserves. What is not so generally realised is that A SIMILAR RIGHT IS ENJOYED BY THE SHIPPING COMPANIES. Even with normal company accounting, the scope for concealment is huge, as most progressive accountants now recognise. It is particularly so in a maze of interlocking companies which the shipping industry is. On top of this, we have the industry legally permitted to conceal its true profits position. This gross privilege has however, recently been challenged by a Committee which was set up by the Conservative Government – the Jenkins Committee on Company Law, which reported in 1962 ... In view of the Jenkins Report findings, there are two main objections which can now be made by the NUS.

  1. It is impossible to assess how much or how little the shipowners offered until the NUS obtain access to the full shipowners’ accounts. It is impossible to judge the reasonableness or otherwise of their offers.
  2. When the shipowners claimed to represent “the national interest” in their evidence to the Jenkins Committee, that Committee indicated the divergence between the owners’ commercial interests and the national interest, and recommended the revoking of the 1948 Shipping Companies Exemption Order. We now claim that since this Order has not been revoked, this constitutes at least one reason why the identification of the owners’ commercial interests with the national interest cannot be accepted. We can reject the Inquiry’s views of paragraph 40 on the grounds that they are based on seriously incomplete knowledge of the shipping companies accounts. The failure of the Inquiry to refer to the Jenkins Committee, or to the 1948 Order, are further examples of the gross bias written into the Inquiry. The Law, we now can see, as well as Inquiries, Government, and Press, is biassed in favour of the shipowners. From the point of view of this strike, the most important sentence in the Jenkins Report is the following:

“The exemptions are criticised on the ground that ... they prejudice the bargaining position of employees, and that they can make it possible to conceal inefficiency of management.”

According to the 1948 Shipping Companies Exemption Order only the Board of Trade and the Ministry of Transport have access to the shipowners’ “confidential information.” Under point 5 of this same Order the Board of Trade can obtain from a shipping company “such information with regard to its accounts as the Board may require.” Apparently, the NUS like the general public is legally debarred by this 1948 Order from receiving information either from the Board of Trade or the Ministry of Transport about the full shipowners’ accounts. The NUS view should be that the 1948 Shipping Companies Exemption Order gives the shipowners a dangerous power over Government departments and prohibits the Government from acting impartially in industrial disputes in the shipping industry. The Board of Trade and the Ministry of Transport are bound to treat shipping company’s information as “confidential.” The Government should revoke the 1948 Order immediately, as Jenkins recommended, and as a first step to full Union access to the Companies’ accounts.

This appeal was taken up throughout the Seamen’s Union. The Union Executive endorsed it: 23,000 copies of the pamphlet containing it were sold all over the country. Here was a fascinating example: a classic workers’ control demand, applied to this crucial dispute, at once came to life when the struggle became real.

Woven with similar demands, into a strategic pattern of transitional, alternative measures, this call could flare up into a signal blaze in the confrontation which may well be impending. If workers have confidence enough to demand power in their own hands, their struggles take on new and dramatic forms. The shallow and deceptive determinism which postpones all possibility of speaking this language, and all likelihood of its being heard, until some distant and abstract Nirvana, is itself one of the most obstructive fetishes which the Labour Movement must overcome in order to reach forward to its freedom.

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Last updated: 17.12.2007