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Ken Tarbuck

Productivity Deals and Workers’ Control

(Spring 1970)

From Marxist Studies, Vol. 2 No. 2, Spring 1970.
Scanned and prepared for the Marxist Internet Archive by Paul Flewers.
Minor spelling errors have been corrected without indication.
Marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

Since the ‘prices and incomes policy’ of the Labour government has been a relative failure we have witnessed the growth of the demand by the bosses for ‘productivity deals’ and this has had the full backing of the present government.

The question we have to pose here is: why the emphasis on such bargains? There are two main answers to this. Firstly – like all of the measures taken over the last six years – it is an attempt to stop the tendency of the rate of profit to decline, or to use the euphemism of the employers ‘to reduce labour costs’. Secondly it is a question of power. This is intimately linked with the first aspect, because the underlying reasons behind productivity deals is that since the end of the war in 1945, workers have managed to wrest some degree of control over their wages and conditions of employment, that is, there has been a decline in managerial control over certain aspects of the work situation. Productivity deals are meant to whittle away the controls established by the workers and once more reassert full managerial control over the whole productive process.

The demands of the employers of course vary from one plant to another, depending upon which aspect of control they feel to be the most important to reassert their authority over. In some factories this has taken the form of a drive to introduce Measured Day Work, that is, the abolition of piece-rates. In other situations it has been an attempt to regain control over the allocation of overtime, but above all there is the demand for ‘flexibility of labour’. This essentially means that the management can move men or women around at will, and also determine the manning of productive lines. Each case is decided on in an empirical way, the criterion being where do the shop stewards have the most control and then attempting to reduce it.

The employers and the Labour government have common aims in this drive, Barbara Castle urging on the employers to push for these sort of deals. However, this spills over into the political arena, because along with productivity deals there have been the attacks on the right to strike, as was witnessed last year in the notorious document In Place of Strife (sic). The present Labour government has done all that it could to assist such deals, particularly in the creation of a postwar record number of unemployed. This is another aspect of productivity deals that has to be taken into account, and that they ultimately help reduce the demand for labour in any given area that they [1] implemented on a large scale. There have been a number of productivity deals agreed to that in the first instance produce no redundancy, but as ‘natural wastage’ takes place the actual number of workers taken on to replace this declines, so that the net effect is to reduce the demand for labour and reinforce the upward trend in unemployment. Along with this higher unemployment has gone the attempt to absorb even further the trade unions into the state machine and to make them pliant tools of the employers. Also the same thing is being attempted at shop-floor level where shop stewards are being drawn into collaboration with the management in the implementation of productivity deals and the ‘disciplining’ of any workers who kick over the traces.

The response of the trade-union movement as a whole has been uneven and fragmented, there has been no cohesive strategy worked out. On one extreme there has been downright opposition but with no counter-strategy to them, to one of whole-hearted welcoming. In between these two extremes there are several stances taken up. The Transport and General Workers Union have a potentially useful approach, in that on paper they put forward the idea that productivity deals should be concluded in such a way as to increase workers’ take-home pay and extend shop stewards’ control. However, the reality of how this union has operated leaves a great deal to be desired. The TGWU method could rebound painfully upon its members if this is taken to be a form of conditional support for productivity deals.

The aims of productivity deals are summed very well in the Prices and Incomes Board report of 1968 when it said: ‘A change in the method of working is an essential part of any productivity agreement… The calculations of management must show that the total cost per unit of output will be reduced.’ [2] That is very clear and to the point, because in simple language it means that each individual worker must be exploited to a greater degree, that there must be an increase in the surplus value extracted from the worker. Under no conditions can Marxists support such deals under capitalism. It may well be that the individual worker seems to be better off in monetary terms, but this is only so under conditions of speed-up, tighter supervision and great effort, the lion’s share of which will go to the bosses. Furthermore with the rate of inflationary price increases as they are today it means that the extra monetary ‘reward’ will soon be swallowed up, but leaving the bosses with the gains in reduced costs and greater control over the worker.

What has been the real effect of the prices and incomes policy and productivity bargaining? In 1967 productivity in manufacturing industry rose by 5.9 per cent, average wages by 5.3 per cent, but retail prices rose by 2.5 per cent, thus leaving the workers worse off in real terms than before. In 1968 the corresponding figures were, productivity up by 6.9 per cent, wages 8.1 per cent, prices 5.6 per cent. [3] So that once again any gains in monetary terms were considerably reduced. The nett result of the combined policies of the government and the employers mean that at the very least the share of wages in the national income has been limited to its previous level, but it is more likely that the nett effect really has been to reduce this proportion.

In essence if trade unions accept productivity bargaining on the terms laid down by the government and employers it means that they accept the present division of the national product, and the present distribution of wealth, that is, they accept status quo in this area. But in fact things do not stand still, the ultimate logic is to increase the share of the national wealth going to property and the capitalist class. What has happened in certain cases where productivity deals have been accepted has been that while the wage rates have increased the actual take-home pay has been reduced! This is because there has been a loss of overtime, bonus payments, or piece work.

I mentioned earlier that under certain conditions the introduction of productivity deals has resulted in the reduction of demand for labour; coupled with all the other effects this puts further power into the hands of the employers, because it helps swell the pool of men and women seeking employment, and therefore puts those who are working at a disadvantage because they can feel the pressure of those without work breathing down their necks, and tends to make them more pliable as far as the bosses are concerned.

There is another aspect of productivity bargaining that has to be considered. This is, that it tends to break down solidarity among the workers. Because productivity bargains are usually negotiated at local or plant level, this gives the employers a further lever. Previously minimum wage rates have been usually negotiated at national level, thus at a minimum level giving some feeling of solidarity. Now with productivity bargaining the employers can take the offensive and attempt to play off one plant or section of workers against another. All the time this process goes on it means a reduction of the small elements of control that workers have fought for in the postwar years.

This is why I said that the question of productivity bargaining was a question of power.

What should the workers’ response be to this developing situation? A straightforward rejection, which stays at that level merely leaves the initiative in the hands of the employers. What is needed is a counter-strategy which will take the offensive into the employers’ camp. The very first demand that any group of workers should make is an opening of the books thus getting the information needed to assess the real potential for wage increases or improvements of conditions. Secondly they should frame their demands in such a manner as will give to the workers an increased share of any new wealth created. Coupled with these measures should be the demand that workers will have the right to veto any changes in conditions that they do not agree with. To carry out such demands means that industry-wide rank-and-file committees need to be set up to police both the employers and the full-time officials of the unions. And since we are in the age of the international firm these committees must coordinate their activities with those of workers in the same industry in other countries.


1. The word ‘are’ seems to be missing here – MIA.

2. Quoted by Tony Topham, Trade Union Register (Merlin Press, 1969).

3. Quoted by Tony Topham, Trade Union Register (Merlin Press, 1969).

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Last updated: 14 October 2014