This article was originally published in 1974 under the title "Worker's Control - Labour Party and TUC proposals only extend old ideas of ‘participation'." There was a discussion at the time on the question of workers' control and what it meant. The right-wing leaders in the British labour movement (and internationally) interpreted it as "workers' participation", which meant the workers would be consulted on minor questions, but real control remained in the hands of the bosses.
There had been a series of factory occupations, which in some cases had led to the setting up of workers' cooperatives. There were some illusions in these cooperatives and the leadership of the movement tried to keep the discussion within harmless, controllable channels. They were opposed to outright workers' control but tried to cover this by presenting their version, which in reality was a meek workers' participation.
Today, thirty years later, we believe this article maintains all its validity, in explaining the real Marxist approach to this question. (Editor's note, July 14, 2004)
Throughout capitalist Europe the idea of "workers' control" or "industrial democracy" is being widely discussed both inside the Labour Movement and inside the pages of the capitalist press. This is no accident.
It is partly a response to the growing militancy of the Labour Movement expressed in the events of May 1968 in France, the miners' strikes in Britain in 1972 and 1974, the general strikes in Italy and Denmark and the wave of unofficial strikes in West Germany.
The strategists of capital are increasingly looking for ways to contain these movements through schemes of "social partnership". At the same time by involving and incorporating the efforts of workers both in the office and on the shop floor in the process, the employing class hope to actually increase efficiency and therefore the level of profits.
Any good shop steward knows the sheer waste of production and sheer stupidity exercised by the "whizz kids" of management. Only by the co-operation of the workers can productivity be raised.
So it is no surprise that the more far-sighted employers now support the idea of "workers' participation" or, as it has been called in the past "joint consultation". As early as 1927 in Britain, Sir Alfred Mond of ICI, the big chemical monopoly, sought to create "works councils".
His aim was clear. They were to provide management with information and suggestions from the workforce, to get management instructions over to the workforce, and to guide workers' aspirations to "have a say" into safe channels.
In other words, they were powerless committees in which workers could let off steam. They aimed to embroil workers' leaders into positions where they would take the responsibility for decisions which were really those of management. At the same time this would give the illusion that the workers had an influence in decision-making in order to avoid the workers and their own organisations taking independent action.
This is a crucial point. From the earliest days of these schemes the employers have attempted to use "works councils" as a means of weakening the trade unions in the factories.
They try to counterpose "works councils" (like company unions in the big banks at the moment) to the real organisations of the workers. That is, independent trade unions and shopfloor organisations built through struggle against the most "participatory" managements.
Even the capitalist experts in industrial Relations now admit the truth. As the Industrial Welfare Society put it: "The general impression gained is that the majority of firms do not fully believe in, and practice, formal consultation and all that it implies, but use it rather as a forum for company pronouncements and the airing of employee irritants."
But it is still the case that these councils continue to exist in their original form, especially in the Civil Service and the nationalised industries.
"Worker directors"
The capitalist idea of "workers' participation" has now been extended to the idea of "worker directors" on the board of the company, under certain conditions. The CBI has been pleasantly surprised at the "success" of worker directors in the British Steel Corporation! This is not so surprising when you read the comments of these £10,000 a year worker directors as reported in the Sunday Times (November 7, 1971):
"Of course we are not really directors at all... We don't have anything to do with policy".
"I see myself as an ordinary manager too; not as a worker".
"A tub-thumping shop steward on the board would be disastrous. We have to be free to take management's side if we think it is right".
"I feel unofficial strikes are never justified".
"I am a socialist, but not your Michael Foot type. I am more of a Jenkins man; Roy, of course — not Clive". [Roy Jenkins was a leading representative of the right wing of the Labour Party leadership at the time, while Clive Jenkins was a trade union leader, Editor's note].
Clearly "workers' participation" will bring nothing to workers in industry if it means no more than worker-directors like those in British Steel, which the TUC recommended to the Donovan Commission on trade unions in 1968.
In general the attitude of the trade union leaders is not clear. Jack Jones, in 1970 wrote a pamphlet; "The Right to Participate: key to Industrial Progress" in which he advocated a form of "representative participation" where "managers and stewards would act in co-operation." [Jack Jones was the leader of the TGWU, editor's note].
Such vague pronouncements seem to deny the very existence of class conflict on the factory floor, and Jack Jones went no further than to support the reforms in ICI where the shop stewards took over the role of the employee representatives in works councils.
In the last six months, the CBI has published a report on employee participation, and both the TUC and the Labour Party have come forward with new proposals.
All the ideas expressed in these pamphlets revolve around the system introduced in West Germany known as "co-determination". Under this scheme, workers elect one third or one half of the members of a supervisory board which directs general policy and appoints a management board underneath it to run things from day to day. In West Germany, until this year, only mining and steel had one half of the board, and the right to elect directly from the trade unions some of the members, instead of from the employees as a whole. The rest of industry has no direct trade union representation and only one-third representation on the boards.
Now the CBI is prepared to support such proposals in Britain. This is not surprising when it is remembered that the works council within this system has no right to call strikes and it by-passes the Trade Union organisation.
The Labour Party NEC Report put it [this way] in 1967, "wherever co-determination brings members of works councils still more closely together with management, a new stratum of industrial functionaries to some extent sharing management prerogatives makes its appearance... a privileged upper stratum of the working class".
Even an official German report on the workings of "co-determination" admitted "the individual employee usually feels hardly at all directly effected by its procedures. Though he is able to put forward complaints and suggestions and some information of vital concern is given to him regularly, he has little chance to play an active part in shaping relations at his own workplace". In other words — nothing has changed since Sir Alfred Mond!
Therefore it is disappointing that both the TUC and the Labour Party should see a move to "workers' control" in these schemes. The TUC Report on Industrial Democracy wants the German scheme initially for firms with over 2000 employees, but with 50% representation elected by the trade unions alone.
This is the main advance that the Labour Party Green Paper "The Community and the Company" also advocates. As the Green Paper remarks, "The dualism of workers representation by trade unions and works councils, enables the employers to play off the works' councils against the trade unions".
The Times found this proposal, "offensive to logic" and "practically absurd" for "members of the board need to be responsible for their actions to some interest within the company" and not "outside bodies" like the trade unions! As if shareholders and the bankers on the company boards were not also "outsiders" as far as the workers are concerned!
But are the TUC and Labour Party proposals really a step towards workers' control? The Green Paper itself says that workers' control is impracticable while the private sector continues to exist!! But it does not conclude from this that the private sector should be taken into public ownership.
And why only 50% of the board? This is not answered in the Green Paper. What happens if there is a tied vote between management and unions on the board? The Green Paper has no answer but to take up the idea of a "neutrally appointed" chairman who will make the casting vote!
As it is, the Trade Union directors would have to recognise that "even their right to report back to their workers would no doubt have limits in respect of trade secrets, the dissemination of which could injure the company's competitive position".
It is not the job of the trade unions to protect the profit advantage of any individual company but to fight for improvements in the conditions of the workers as a whole and for the Labour Movement to bring an end to the private profit system altogether.
The employers and some right-wing members of the Labour Party are much clearer than the authors of these documents on the difference between "participation" and "control". As John Stonehouse, MP for Walsall North, put it: "We must establish a clear distinction between workers' participation and workers' control. The former is acceptable; the latter is not... the experience in co-operative management has shown that management expertise is a somewhat rare attribute which cannot be developed in every Tom, Dick and Harry".
This contemptuous attitude towards the abilities of working people flies in the face of the reality on the shop floor. The abilities of workers to manage have been shown not only in the stream of ideas that used to come to management through their "suggestion boxes", but also the power of shop stewards to organise the work of his section or line and the ability to produce work in the best way possible.
Already there is the embryo of workers' control in this shop floor power, but it is restricted, limited, and even stunted in its extent by the power of management and their inefficiency and the demands of the capitalist system itself.
In fact it is not in the interests of the workers to take responsibility for the organisation of production without real control over the policy decisions in a plant or company. Every worker can understand the story that Joe Ashton MP recounted in Labour Weekly (June 28, 1974) of his first job in a Sheffield factory when he was full of enthusiasm and bright ideas. He found a way of doing a job at twice the speed. He was ticked off by his work- mates and told to slow down. He took no notice and was praised by management for his efficiency.
Next day the rate fixer presented him with a new card which cut the price of each job by half as he now produced it in half the time! Result: no increase in wages, but an increase in profits. So ended "workers' participation" for Joe Ashton and thousands of workers like him who have experienced the same thing!
Real workers' control means what it says: control by the workers over the day-to-day activities of a company or plant, so that the decisions of management and employers are continually checked and altered if necessary by the workers. It means that the workers can check the ingoings and outgoings of material and labour, that they have access to the books of the company, knowledge and control over investment decisions etc. It is this power which is really jealously guarded by the capitalist class for good reason.
As Lenin said: "The law safe-guarding commercial secrets serves here not the requirements of production of exchange but of speculation and enrichment in its crudest from. It aids direct swindle which, as is well known, is particularly widespread in joint stock companies and is most clearly concealed by accounts and balance sheets so contrived as to fool the public... This secret means safeguarding the privileges and profits of literally a handful of people against the whole people".
It is not good enough to have information which the company sees fit to give. Real workers' control means the exposure of the scandals and swindles going on in the boardrooms of the rich.
The Labour Party Green Paper cites plenty of these: Lonrho "the unpleasant and unacceptable face of capitalism"; Distillers and Thalidomide compensation, "inside share dealing "and "asset stripping". These are all "trade secrets"' as far as the employers are concerned and they will expect worker-directors not to expose them under the law.
The Labour Party proposals to disclose company information on directors holdings and fees, wages and employment in all plants, share transactions with other companies etc. would be a great step forward but would so threaten the basis of capitalist commerce that the Labour Movement would either back down in the face of the employers' resistance or go forward to full- workers' control of companies.
That would mean the mobilisation of workers' organisations to take control of the offices and factories and therefore dictate to managers what to do. And as Trotsky put it: "This leads squarely to the question of the governmental administration of industry; i.e. to the expropriation of the capitalists by a workers' government. Workers' control, in this way, is not a prolonged 'normal condition', like wage scale agreements or social insurance. The control is a transitional measure, under the conditions of the highest tension of the class war and is conceivable only as a bridge to the revolutionary nationalisation of industry."
Occupations
In this light the positive and negative elements in the experience of the sit-ins and occupations in which workers internationally have engaged in the recent past can be analysed. Above all, the experience of the occupation of the workers at the Lip watch factory in Besançon, France, or the UCS workers, showed that workers can run industry, pay their own wages without a boardroom full of capitalists.
But such action is limited while it remains isolated from the general struggle for a socialist transformation of the economy.
While workers control develops from below, from the shop floor through the plant upwards, workers' management develops from above, and is only meaningful in terms of a socialist planned economy, with the monopolies nationalised.
The control of one or even several factories as happened in Spain in 1936 or in Chile in 1972-3 does not mean the end of capitalism or the capitalist state. Inevitably, while the capitalists remain in overall control of the economy, workers' control cannot be permanently maintained.
Both the Lip and UCS workers had to reach a compromise re-establishing control in the hands of the capitalists, in which even the right to work was not achieved for all employees.
Even the workers' co-operative which is to be set up with Government subsidy in the wake of the struggle at Triumph Meriden is several steps short of workers' control.
The workforce has been drastically reduced along with wages. The co-operative will only deal with production, while sales and marketing will remain in the hands of the Norton Villiers employers. And of course, there is no guarantee that if the venture fails to make a profit even after the massive subsidies that the employers will not still close down the supply, sales and credit facilities. The Fisher Bendix workers now face redundancy again despite the courageous occupation to preserve their jobs two years ago.
As the Lip workers said at the time of their own fight: "We didn't want to fall into the trap of a workers 'co-operative' for if it failed because of isolation we would have been denounced for our 'bad workers' management'... you can't say that capitalism will ever accept an 'island of greenery' in its midst". Without workers' management of the economy, workers' control of the factories cannot be maintained for any length of time.
Workers' management
In this sense the demand for workers' control is only a transitional demand to be taken up by workers in struggle as part of the programme for the complete socialist transformation of society. It is not a sole or ultimate demand made by socialists as some tendencies in the Labour Movement imagine.
While workers' control develops from below, from the shop floor through the plant upwards, workers' management develops from above and is only meaningful in terms of a socialist planned economy, with the monopolies nationalised.
It means management by the workers of the overall plan of the economy, making the general investment decisions and plans for growth to meet the needs of the people. Socialists are not syndicalists who believe that control of individual plants or industries by the workers in them can guarantee the harmonious running of industry without overall management of the economy by the workers as a whole.
This means that ownership of industry cannot remain in the hands of the capitalists. Only public ownership of the major monopolies would guarantee workers' management and workers' control in the individual plants. Workers would develop new forms of organisation to manage the economy, probably similar to the workers' councils or Soviets that sprang up in Russia in 1917.
These workers' councils would involve all sections of the working class including tenants, housewives, students and old age pensioners as well as the industrial trade union organisations of the workers. Regular elections of delegates, subject to immediate recall, and officials tied to the average wage of a skilled worker would safeguard the workers from the growth of a bureaucracy of officialdom usurping power. These safeguards were first laid down by the workers of the Paris Commune and taken up by Lenin and the Bolsheviks in 1917.
In Britain, the nationalised sector of industry is managed bureaucratically by many of the former capitalist owners of the industries or by retired colonels etc., at massive salaries.
The only workers' control within these enterprises is that developed by the shop floor workers themselves against the management. It is the supreme irony that the main argument that the Tory leaders are now using against Labour's plans for further nationalisation is that workers in the public sector in no way own or control their industries!
Nationalised industries
And yet the bureaucratic structure of the nationalised industries was introduced by Herbert Morrison and other right-wing [Labour] leaders under the direct pressure of the capitalists and the Tories during the period of the 1945-50 Labour Government. The Labour Party should return to the principles passed by the Labour Party Conferences in 1931 and 1937; that previous owners of nationalised industries should have no further say and that the first change in the public company should be to the wages and conditions of its employees, not to the massive interest payments or compensation to former owners which cripple industries like rail and coal now.
We should demand control of the present nationalised industries under a scheme which would guarantee a majority for the workers on the governing boards. One third of the boards should be elected by the unions in the industry, one third by the workers on the shopfloor, and one third by the [Labour] Government.
The workers' organisations would have a majority against any bureaucratic tendencies. But at the same time, the overall interests of the working class in the economy would be preserved. Already some TU leaders like Ray Buckton (ASLEF – on the railways) have publicly supported such a plan (at LPYS Conference 1974). [The LPYS was the youth wing of the Labour Party and was dominated by the Marxists, editor's note]
Only by such a clear programme can the sham of "participation" be exposed and the real alternative of workers' control and management be spelled out. The present Labour Party and TUC proposals are enough to enrage the employers, but are not enough to provide a way forward for the Labour Movement in its struggle to end the power of the capitalist class and all the scandals and horrors associated with its continued rule.
They are proposals based on an acceptance of the continued existence of capitalism. A real programme for workers' control is a step towards a programme for the abolition of capitalism. For only that can guarantee that every aspect of the working lives of working people is not decided by a handful of plutocratic millionaires.
Originally published in the Militant, July 19, 1974