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Emanuel Garrett

The GM Strike and “Free Enterprise”

(3 December 1945)

From Labor Action, Vol. IX No. 49, 3 December 1945, pp. 2 & 3.
Transcribed & marked up by Einde O’Callaghan for ETOL.

The world’s largest union has struck one of the largest corporations in the world. Under any circumstances this would make the strike of the United Automobile Workers against General Motors Corporation a strike of unusual significance. But there is more involved in this strike than the simple matter of size. The auto workers’ strike has a significance rare in the history of the labor movement in this country, or any country, because in it basic issues of principle between capital and labor are presented on a new and fundamental level.

There have been big, important, vital strikes before. Many of them. Our history as a labor movement is full of them. Strikes established labor’s right to union organization. Strikes established the eight-hour day. Strikes have raised the wage level. The auto workers themselves played a heroic part in the great sit-down strikes of 1936 which defended the principle of industrial unionism and resulted in major union gains. The sit-down strikes, the mine strikes, other strikes, were each of them milestones in our history of struggle. The difference between these strikes and the present strike is that labor has here for the first time, through a union that speaks for 1,000,000 workers in a basic industry, clearly and specifically challenged the system of private enterprise.

There is, thus, more at stake in this strike than a demand for a thirty per cent wage increase. For, to effectuate its demand for a wage increase, the union has demanded the right to participate in the determination of prices and the distribution of profits. And the adamant stand of the company executives derives not only from their unwillingness to pay the increase demanded, but from their decision to make this a defense of their system of free enterprise. Let us, then, examine both sides of the argument, sec who is right, who is wrong.

GM Is “Right” ...

In what sense, though? In the sense that they are defending the interests of the employers, the capitalist system of free enterprise For, that is how they are putting the fundamental issue.

On the surface is may appear that they, and other spokesmen of big business, are engaged in what is no more than a union-smashing campaign. That is, to be sure, involved. They would like to smash the unions today, as always. More so. But they know they can’t do it. Behind their promotion of antilabor legislation, behind their circulation of ponderous documents that “unions are against the public interest” lies this fundamental issue.

They are right in defending the system of free enterprise. It is THEIR system; they thrive on it. THEY know that the logical consequence of labor interference in price and profit regulation is the end of capitalist free enterprise. THEY know it leads to workers’ control of production and that workers’ control of production leads to a workers’ government.

The corporation views as intolerable the union's demand that it Open the books. It tells the union to “abandon your attempt to negotiate wages on the basis of past profits, assumed future profits and our selling prices.” Under the system of free enterprise the employers are free to exploit labor, are free to foist their own monopolistic prices on what they so tenderly call the “public,” and are generally free to gouge as much profit as they can out of labor. And all of this makes sense if that system serves your interests, provides you with wealth and luxury.

Free enterprise is no longer entirely free when labor can look at the books and tell the boss: “You’re making too much profit; you’re soaking the public loo much for this product; you’re able to pay a thirty per cent increase and still make undeserved profits.”

General Motors is right. As a capitalist corporation it defends capitalist principles. But ...

Reuther is Right ...

That is to say, he is right from the point of the working class and – give this close attention – from the point of view of society as a whole.

How has the union argued for its wage increase? Show us the books and we – WE, the men and women who actually produce General Motors products – we will decide your (the corporation’s) ability to pay wages, the extent of your profits, the necessity, if one exists, of an increase in prices. In other words, the union is telling the boss that it wants a voice in the operation of the industry. And what does that amount to but the undermining of the system of free enterprise.

Reuther, as leader of the auto workers in this struggle, has already marshalled incontrovertible, Statistical facts on the company’s ability to pay the wage increase without an increase in prices. The capitalist press has either had to grudgingly admit the validity of the union’s position, the impressiveness of the union’s figures or (in greatest concern over THEIR system of free enterprise) shied away from their publication.

In effect, in making these figured known, in demanding that GM open the books so that the accuracy of these figures may or may not be established, the union is proposing to dictate wage, price and profit policy. And, we repeat, it is right in doing so. The men and women who actually operate the machines, turn out the product and produce the profit are most legitimately concerned with what the bosses make out of the workers’ sweat.

Further, it is the union that, in making these demands, displays itself as representing the genera) interest of the people. GM may say all it wants to about the interests of a mythical public. In GM terminology the “public” equals those who profit from capitalistic big business.

GM defends its right to soak the consumer any price it chooses to fix on its products. The union, however, says NO! In doing so it reveals labor as the champion not only of its working class interests, but of the entire people (excluding only profiteers, coupon clippers, editors of the capitalist press and others of their ilk whose welfare is exclusively linked with the system of exploitation called free enterprise). Thus, Reuther is right-right for auto workers, right for labor as a whole right for the mass of people generally – just as GM is right for the capitalist class. We get, however, to other aspects of this discussion, and we find that ...

GM Is Wrong ...

Wrong from the point of view of which we have just spoken. The system for which it speaks is against the interest of the vast majority of the people, is outlived, is bankrupt, stands in the way of progress.

Free enterprise is a fetter on production. That’s a phase out of any socialist text. It organizes production exclusively with the purpose of providing the owners with the highest possible profit. At one time, historically, this corresponded with the progressive development of the productive machine, its ability tq produce limitless quantities of articles for the satisfaction of human wants.

But the productive machine has now reached a level where it is impeded by free enterprise. It has the capacity to produce plenty for all. The class interest of the employers, the exploiters, denies this plenty to all. Instead of plenty there is want, wages do not cover the necessities of life, there is unemployment.

When GM circulates a statement by a Chicago professor (who at least knows on which side his bread is buttered) which reads: “For my part, I simply cannot conceive of any tolerable enduring order in which there exists widespread organization of workers along occupational, industrial functional lines,” it is merely saying that the organization of labor is a threat to ITS system of order. When it speaks of the “public interest” it is speaking of its OWN interest.

Are workers part of the “public”? Are farmers? Are others whose interests are best served by the struggle of labor? There is no such thing as a “public” interest. How can corporation executives and working men possibly have the same interest? Does it mean the mass of people? Then it is clearly obvious, on the basis of the argument that we have already made, that the GM stand is wrong. There is more to it, however, than that, for ...

Reuther Is Wrong ...

He is wrong in so far as he does not fully appreciate the far-reaching consequences of his own logic. There is one logical development of the union position, namely, to advance toward the nationalization of industry under workers’ control. Because the union’s demands as they stand are fundamentally incompatible with a system of free enterprise, it is impossible to reconcile them with or to confine .hem within the framework of this bankrupt system.

In making this criticism, we are not in any way belittling the position of the Auto Workers Union. Reuther and the auto workers have already immeasurably raised the level, the political and economic and social level, of labor’s struggle in the United States. They have performed a tremendous service to the labor movement, elevating the quality of its struggle to encouragingly new heights.

That is precisely why it would be wrong to go no further. The issue has been raised. It cannot be eft in mid-air, nor will it permit itself to be left in mid-air because of the very potency of its logic.

The time is ripe for the next step, and Reuther, as spokesman for this huge and powerful body of workers, is in a position to raise the issue for, solution in all its intrinsic lucidity.

As we have already said, GM knows that the existence of free enterprise is at stake. Victory for the auto workers does not automatically abolish the capitalist system. It would, however, represent a major triumph over that system. GM knows as much. It is wrong for labor not to equally understand the implications. We have to understand plainly that our future depends upon how we come to grips with free enterprise, and upon how we declare ...

What is Right? ...

And let us summarize what is right. Industry, in this case through General Motors, has declared itself incapable of providing a decent wage and acceptable standard of living for the working class. Against the needs of the working class, and of the vast majority of the people, it pits its “right” to wrest unlimited and uncontrolled profits out of its private ownership of industry.

The monopolists have admitted that they cannot operate industry in the interest of society as a whole. The Workers Party, in a statement issued some weeks ago, at the beginning of the strike wave, called this a challenge, a challenge that the auto workers, who have implicitly recognized the situation for what it is, must take up completely.

“This is a challenge. It should not remain an empty phrase. If it is to mean something, the organized labor movement must say:

“The monopolists stand in the way of the life interests of the masses of the people. They are confessed bankrupts. We demand the nationalization of big industry [and General Motors is big industry] under workers’ control?”

Labor is fully capable of operating industry – and operating it in the interest of society! This is no extravagant claim. Labor has the industrial know-how. And its interests are one with society as a whole. The auto workers have demonstrated this in their price control demand. They have also demonstrated, in the argument they have made on the financial condition of the company and in their earlier recommendations on organizing production that labor lacks nothing in the knowledge necessary to operate industry.

The bloodsuckers who call themselves “captains of industry” have confessed their bankruptcy. The auto workers have already, in their demands, taken steps that LEAD, in our opinion, to freeing production from the restrictive, bankrupt hands of these monopolists, and putting it in the. hands of labor. We know that labor is capable of operating industry. From that it .follows that industry must be nationalized UNDER WORKERS’ CONTROL.

Nationalization will not be given us on demand. The “captains of industry” will not readily yield their system of monopolistic enterprise (for that is what so-called “free” enterprise really means). Nor will the government give it to us, for it is the government of the industrialists. It is THEIR government. It is based on this system, which breeds insecurity and want on one side, and incredible wealth and indulgence on the other.

Just as the issue of higher wages raises the issue of the entire system of capitalist enterprise, so too it raises the issue of the kind of government we want. They will not give us nationalization of industry under OUR, the workers’, control. But a workers’ government will! That, then, must be the ultimate goal of our struggle: from demanding a decent wage standard – to genuine year-around security – to nationalization of industry under workers’ control – to a workers’ government.

Yes, brothers of the union movement, that is socialism! But that is RIGHT. That is how we can give DECISIVE meaning to our struggle. And in conclusion let us quote again from our Workers Party statement:

“All that socialism sets itself to do is to achieve plenty for all, peace, brotherhood, security, freedom. As socialists, we of the Workers Party march hand in hand with the workers in every step they take toward improving and strengthening their economic, social and political position. That is, we are unreservedly with the labor movement and with the just demands that it is making.”

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