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E. Garrett Replies to a Reader

What “Open the Books” Means

(10 December 1945)

From Labor Action, Vol. IX No. 50, 10 December 1945, p. 2.
Transcribed & marked up by Einde O’Callaghan for ETOL.

Dear Comrades:

In the December 3 LABOR ACTION, Emanuel Garrett in his article, The GM Strike and ‘Free Enterprise’, says “The union (UAW) has demanded the right to participate in the determination of prices and the distribution of profits.” The writer further states that these two demands are something new in the labor movement.

There is no disagreement with the novelty of demanding to participate in the determination of prices, but I think it incorrect to say that the UAW is demanding the distribution of profits and, therefore, in this respect, is opening a new page in union history.

In demanding the right to inspect the company’s books, Reuther has said that he would scale the union’s demand from 30% down to 0 if the company’s profit figures warranted it. He doesn’t say what method he would use to evaluate GM’s profit position, but if we assume that, were the company’s books (by some miraculous miracle) to show a profit position at the present time similar to the immediate pre-war years, Reuther would settle for the same wage scale as prevailed in 1939. According to Reuther’s argument that is the reasonable assumption to make, and judged on that basis, I see no question of the UAW “demanding the distribution of profits.”

Rather I would say that the UAW is tying the wage scale to the level of profits (instead of demanding a decent living wage regardless of GM’s profit position) and is not at all departing from the traditional trade union practice as formulated by Engels in Condition of the Workers in England (published in 1844). As quoted in the educational bulletin of the Workers Party on the Role of the Trade Unions, Engels wrote: “Their (the trade unions) object was to regulate the rate of wages according to the profit of the employer, to raise it when the opportunity offered, and to keep it uniform in each trade throughout the country.”


Comradely yours,


Comrade Sid has raised a point that validly demands explanation. His is a legitimate question, but we think he errs in failing to understand the revolutionary change in union struggle embodied in the UAW proposal.

The relation between wages and profits has long been recognized in socialist economics. Thus, Karl Marx who was the great genius of socialist theory and whose works we recommend to our readers as essential reading matter, wrote in his little pamphlet, Wage Labor and Capital, the following:

“What, then, is the general law which, determines, the rise and fall of wages and profits in their RECIPROCAL (our emphasis – EG) relations? They stand in inverse proportion to one another. The share of capital (profit) rises in the same proportion in which the share of labor (wages) sinks/ and vice versa. (”Share” here refers to the share of each class in the values created by labor power – EG.) Profit rises in the same measure in, which wages fail, it falls in the same measure in which wages rise.”

In that sense it has been standard union practice to try to raise wages “when the opportunity offered,” that is, when profits have risen.

But there is something altogether new in, the UAW position, so new that we feel justified in calling it a revolutionary development – in union concepts. The UAW demands the right to examine the books, and on the basis of what it there sees, it proposes to tell the boss what it considers a legitimate wage, hence a legitimate profit, and with that to tell the boss what price is justified, hence the UAW demand is not the simple economic demand traditional in union struggle.

What Is New

Do not forget that the union’s slogan is “Open the Books.” Yes, the demand has been made before; so too, unions have previously sought to intervene in price regulation. The needle trades unions have, for example, asked to see the books. But never before has a major union in a major industry, the largest union in the world, made it the platform of its struggle for higher wages. The UAW’s action has introduced a new and far-reaching element into union activity, more correctly it has introduced a new concept into union politics. This will become established trade union program because its logic is irresistible, and it creates the possibility of further advance.

No, it will not abolish capitalism. But it makes a dent in the capitalist system. That we tried to prove in last week’s article. It is one thing to demand higher wages, to argue, in demanding higher wages, that profits are sufficiently high to make the increase possible. It is entirely different to tell the corporation: we’ll examine your books, and we’ll decide the size of your profit along with the size of our wages. Isn’t that equivalent to demanding a hand in the distribution of profits?

To be sure we socialists go further. We demand the abolition of the profit system altogether. But we recognize the tremendous advance it constitutes in union politics when workers intervene in the prerogatives of free enterprise, and weaken to that extent the capitalist system. The next and logical step is workers’ control of production, nationalization of industry and a workers’ government. For these in our opinion necessarily follow, and so we argued in our article. The entire issue of capitalist enterprise versus labor’s interests (and the interests of the great mass of the population) is raised and a challenge presented; equally well the issue of government, of politics. That is the point. We repeat, it is a tremendous advance.

Where the Letter Errs

Comrade Sid, however, asks this: suppose the books reveal lower profits, what then? In asking the question he overlooks, first, the value of the principal that the UAW is seeking to establish; second, the confidence of the auto workers to get what they want by action; third, the matter of agitation that is involved. No union ever started on a wage campaign by saying that the employer couldn’t pay. The UAW in making its wage demands does so on the basis of the corporation’s ability to pay, but in doing so introduces this new principle.

Will the union accept a wage cut if the books reveal the impossible? Of course not. We are quite sure that Reuther, and certainly the auto workers, would accept nothing of the kind. And why not? Because they have already demonstrated their advanced fighting position, by the very demand they have made, not to speak their confidence in themselves as a powerfully organized body of workers. We are not at all concerned with profits. Neither, we are sure, are the auto workers. They want a living wage regardless of profits. That is precisely where their slogan has effect. For they propose to distribute profits, to tell the boss that he cannot have as much as he wants. Be assured that the corporation executives. understand the implications of the UAW position. They understand too that workers who challenge “free enterprise” by demanding: “Open the Books,” will not bear the cost of profit losses by wage cuts.

We cannot exhaust the subject in this reply, or even in a lengthy article. We shall have to return to it again and again. For, permit us to use the word again, it is a revolutionary development.


E. Garrett

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