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Productivity Deals

The Employers' Offensive: Productivity Deals and How to Fight Them, by T. Cliff, Pluto Press. 6s.

In the preface to his new book on productivity deals Tony Cliff tells us that it is intended as a handbook to enable shop stewards to understand and resist offers of productivity deals. He regards such offers as "part of a major offensive by the employing class of this country to shift the balance of forces in industry permanently in their direction".

This book is a continuation of Incomes Policy, Legislation and Shop Stewards which T. Cliff and C. Barker wrote in 1966. The review of that book in the SOCIALIST STANDARD (August 1966) ridiculed its claim that out of the shop stewards there would come a new "revolutionary working class movement". Cliff now admits that we were right and he was wrong — "Life" he says "proved much more complex than the theory put forward". Specifically he admits that incomes policy did not stop the rise of all wages, it did not provoke general working class resistance "economic, ideological and political", and there did not arise "a new workers' movement... overcoming the fragmentation of the working class".

Nothing daunted, he is having another go. What Incomes Policy failed to achieve he now expects to be achieved by the employers' campaign for productivity deals. Events will prove him wrong again.

His argument this time is that because of the big increase in the size of investment required for modern industry, the rapidity of technological change and the intensity of foreign competition, capitalism needs to plan years ahead and have long-term control of costs, including wages. The problem is alleged to be particularly great for British capitalism because inflation and the adverse balance of payments lead to "stop-go" and a slower rate of expansion, which in turn raises the cost of production per unit of the products. So the capitalist must have productivity deals which undermine the workers' shop floor organisation, the shop stewards. This will be resisted with the help of Cliff's handbook and the new revolutionary movement will emerge.

It will be seen that fate has been very unkind to the author; for about the time his book was being printed the adverse balance of payments was converted into a surplus; also inflation is going on in most other countries too; and productivity deals are going ahead often with the approval of the shop stewards.

One of the author's errors is to underestimate the resilience of capitalism and the resourcefulness of business managements. Having seen that capitalism would rather like certain things he imagines that there are "musts"; but there is no must about it. Long term wage contracts would be useful to the capitalists but they are not indispensable, especially as employers know by experience that unions have little hesitation about presenting new claims during the life of a contract if circumstances favour this. The situation recently arose in America of the General Electric Company fighting for a one year wage contract while the unions were pressing for three years.

Again, employers would like to be able to enter into long period contracts with buyers to supply at a fixed price, but this is not a matter of life and death. The Shipbuilders and Repairers National Association reports that contracts to build ships are now being drawn up with a clause which allows for some form of price variation to meet unforeseen higher costs {Financial Times, 30 April 1970). Many other firms do the same where completion of the job extends over a long period.

What vitiates much of Cliff's theorising is that he seems to be quite unaware of the past history of capitalism. He draws hasty conclusions from current events as if nothing very much happened before he came on the scene to observe them.

He tells us for example that in this country it was the Macmillan Government in 1962 which first embarked on an Incomes Policy. It was in fact started in 1948 by the Labour Government when it laid down the principle that there was to be no general increase of wages "unless accompanied by a substantial increase in production". The same idea was present in the productivity campaign of 1920.

He says that ten years ago productivity bargaining was "a new and strange phenomenon to most workers in British industry". Little is new about it except the name. The capitalists have always been intent on eliminating unoccupied time and wasted effort from the productive process and workers have always with varying degrees of success, resisted: it and tried to bargain about it. The basic attitude of the employers has always been the same as it is now, to try to get all the benefits of increased productivity themselves. Marx, in Volume I of Capital (Chapter XXI), dealing with the bitter struggles over piece work wages and the workers' attempts to get higher rates in line with increased productivity and profits, ended the chapter with the following:

“The capitalist . . . declares roundly that the productiveness of labour does not concern the labourer at all.”

Many of the present productivity deals are concerned with the worker giving up trade union restrictive practices for a wage increase. In the first world war workers were unwisely induced by appeals to their patriotism to give up trade union practices and accept dilution, getting in return only a pledge that after the war what had been given up would be restored. When that time came the workers were not in a position to make the pledge stick and, as Sidney Webb tersely remarked in his History of Trade Unionism "Trade unionists were on the whole 'done'".

Cliff has a good deal to say about Work Study (Measured Day Work) and job evaluation. Here again there is little new except that the methods have become more elaborate. Nearly half a century ago factory workers were bitterly resisting employers' attempts to introduce the Bedaux system of unit measurement (the work expected of a worker in one minute). Job evaluation was years old when in 1955 it was formally introduced in the Civil Service. It was being used in a rough and ready way by the Post Office at the end of the nineteenth century and the Post Office long ago developed its own system of units of work to adjust the numbers of staff to the volume of traffic.

There is one superficial change concerning wage bargaining brought about by years of inflation. For a quarter of a century governments have more or less continuously run a policy of depreciating the currency, with the consequence of an abnormal rise of prices and the cost of living. They have done this as part of their belief that they were thereby securing "full employment". A rising cost of living is politically unpopular so the governments have also strenuously sought to offset some of the rise by finding ways to increase productivity per worker (Reducing the amount of labour required to produce commodities). As in this situation employers could count on getting continuously rising prices for what they sold they were content to put up a more or less token resistance to wage increases required to keep up with the cost of living, offering their real resistance to increases beyond that level, just as when Marx wrote about it a century or more ago. Official figures for 1969 give a revealing picture of what happens.

“Wages and salaries alone rose by 7 and half per cent; but this increase was reduced to 5 and half per cent by higher personal tax payments and national insurance contributions. Most of the remaining 5 and half per cent rise in personal disposable income was offset by higher prices . . . “ (Financial Times. 9 April 1970.)

The workers would be on sound ground in resisting all attempts to intensify their work or worsen its conditions and should always try to get the highest wage possible in the circumstances of the time, the strike, or threatened strike being the one way to test the possibilities. Cliff turns this simple proposition into something needlessly complicated. He produces a handbook for conducing productivity bargaining but declares himself to be "bitterly and unalterably opposed" to such deals. Then he hedges by saying that you can't just say no to an employers' offer, and by directing his fire against "derisory" offers and ones which give only "a few miserable shillings". His real reason why shop stewards cannot just say no is that many workers want such deals and if the shop stewards take a negative attitude they isolate themselves from the workers.

One of his recommendations is that shop stewards should "invent" restrictive practices the abandonment of which will be of no value to employers and then sell these to the employers for wage increases. It is open to question whether the employers' negotiators are so easily deceived but if Cliff believes them to be that naive it is for him to justify making these tricks public. Certainly the point was taken by Peter Jay who reviewed the book in the Times (25 March 1970) for he recommends to "any business executive who expects to be engaged in negotiating productivity deals" to get a copy and "know your enemy".

Cliff is a firm believer in leadership as against the Socialist principle that working class emancipation requires the understanding of the workers themselves. He believes however, that the "natural leaders" of the workers are the shop stewards and other "floor" representatives and not the national trade union leaders.

His case against national trade union leaders and for shop stewards is that the national leaders get out of touch with their members, but he then admits that many of the shop floor representatives also "get completely divorced from their base". Without knowing that he is doing so he actually shows how little use his "good" leaders are for they cannot act beyond the understanding of the workers; he grants "that a trade union leader can't be expected to march 10 miles ahead of his membership", and, as already remarked, he admits that unless shop stewards fall in with workers' support for productivity deals they become "isolated".

One of his proposals for reforming the trade unions is that "union officials should get the same rate of pay as the average members". This is a question that occupied the unions as soon as the need arose to have full-time officials and to many trade unionists. Cliff's proposal looks a useful one. It was being propagated nearly half a century ago by an organisation of trade union office staffs. It is practicable for unions of comparatively highly paid workers and something of this kind is operated by some unions. But where the membership is of low paid workers it can be quite impracticable. For example, in the agricultural workers union, which has its head office near the centre of London, it would mean that the full-time officials would be paid considerably less than their clerks and shorthand typists because it would be quite impossible to recruit staffs in Central London at the wage of an agricultural worker.

In any event it is misdirected. What is of much more importance is that union membership should see to it that they formulate policy themselves and insist on officials and executives and shop stewards carrying it out.

Cliff's book is dotted with references to Socialism and the abolition of capitalism but without any real understanding of what Socialism implies — on occasion he indicates that he thinks state capitalism (nationalisation) is Socialism. Emancipation is not going to be achieved by non-Socialists led by shop stewards because it requires a Socialist working class getting control of the machinery of government.

So little does he understand the futility of putting a party of capitalism in control of the machinery of government that he and his organisation ("International Socialists") were telling the workers to support Labour candidates at the last two elections — and are doing so again at this one. His book is not going to achieve the new revolutionary working class he anticipates.