Capital & Class. - 1980. - Issue 12

`Mass Demonstration' Movements in Japan in the Period of Postwar Crisis Yamamoto Kiyoshi

It is commonplace that analysis of the world capitalist crisis of the 1970s must be based on understanding the `long boom' o f the 1950s and 1960s . In turn, the long boom did not arise like an automatic phoenix from the ashes of the second world war. It was based on a vital period of capitalist history from the last years of the war to the early fifties, during which the conditions for the boom, above all the social and political conditions, were established (see Gabriel Kolko's books The Politics of War and The Limits to Power for the best surveys-especially of the political and diplomatic aspects) . This process was nowhere more important than in Japan, which was to become the star of the most expansive period of capitalist history . This article is based on part of the author's book, unfortunately not translated into English, The Labour Movement in the Post-War Crisis, Vol. I (Ochanomozo Shobo, Tokyo, 1977) . In this book Yamamoto challenges what he describes as the typical position put forward in studies of the period which is that the Japanese masses were faced with the tasks of carrying through a `democratic revolution' . Yamamoto points out that while the struggles of the immediate post-war years were clearly defeated 'Japanese society really exists as a democratic and capitalist society'. Yamamoto's solution to this `contradiction in logic' is that the defeated 'revolutionary' movement was actually a movement for socialist revolution . In this piece, reprinted from the Annals of the Institute of Social Science, No . 17 (University of Tokyo, 1977), he discusses one of the two major forms of struggle undertaken-mass demonstrations . The context in which these demonstrations took place included* a

Extreme economic hardship-industrial production fell to

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b

c

d

one-tenth of its pre-war level immediately after the surrende and food supplies were at starvation levels, as the article points out; The US occupation ruled through the old governmenta system although leading figures were subject to purges begin ping in 1946; The Labour Movement played no role in the downfall of the old regime, in contrast to Germany and Italy . Whilst union ism spread rapidly, covering nearly one million workers by the beginning of 1946 and 5 million by the end, this was not based on a return to pre-war traditions (the maximum number of workers in unions in the 1930s was less than half cz, Despite being a tiny party before the war the CP's oppositions to the war, and the reflected prestige of the Soviet Union,, gave it an extremely influential position . The key point isi that the CP supported the American Occupation as the ; bearer of the democratic revolution.

Yamamoto points out that the mass demonstrations were paralleled by production control' struggles . He analyses these ins another translated article `The Production Control Struggle in the Period of Postwar Crisis' (Annals of the Institute of Social Science 1972) . He shows that these struggles, during which the workersi took on the running of many enterprises, were mainly abouti union recognition and work conditions and generally stayed) within legal limits (in one case all decisions of the workers were forwarded for approval by the company's president) . Only in a i few cases, in the spring of 1946, were the firms run in the name of the union and attempts made to organise bartering of products with other factories and farmers' associations, as Yamamoto says `seeking the way for reconstruction of the Japanese economy , under the leadership of the workers' (p . 73) . In his interpretation after the defeat of the mass demonstrations which he describes in this article 'the production control struggle lost the prospect of unity with the movements in the streets that were presenting the problem of power (and) the labour unions lost the prospect of turning into factory soviets'. After this the struggle of the Japanese workers became more and more defensive with the Occupation Forces' injunction against public sector workers striking in February 1947, the implementation of the deflationary `Dodge Line' at the end of 1948, red purges in 1949 and a succession of battles in which the strongholds of militant trade unionism in the private sector were systematically smashed, culminating at the Miike Coal Mines in 1960. This whole process was the indispensable foundation for the phenomenal subsequent success of Japanese Capitalism . Yamamoto himself has graphically charted one case study of this in his current work on Nissan (Datsun), an English summary of which is published as 'Labour Management Relations at Nissan Motor Co . Ltd . (Datsun)' (Annals of the Institute of Social

`MASS DEMONSTRATION' IN JAPAN

7

Science, No . 21, 1980) . The immediate post-war months discussed in this article were vital. In Yamamoto's view `If the collapse of Japanese Capitalism had been possible, it could not but have been in this period' (1972, p . 64) . *See John Halliday's A Political History of Japanese Capitalism for an excellent discussion .

Introduction

The main purpose of this article is to scrutinise the development of `mass demonstration' movements in Japan from around August 15, 1945, the day of Japanese defeat in the Second World War, until May 20, 1946, when Gen . MacArthur issued a warning against mass violence . This article deals mainly with the workers' movements outside factories in the immediate aftermath of the war, and forms a sequel to an analysis which I made previously of workers' production control (or 'work-in') struggles that took place inside the factories during the same period .[ 1] Workers' movements outside the factory seem to have attracted far less attention than they deserve in conventional treatises on the history of Japanese labour movements . Workers' movement out into the street has been either viewed with disdain as a purposeless act which amounts to no more than streetfighting and mobbing,[2] or has been brushed aside as something simply not worthy of careful study .[ 31 The failure to understand the significance of the struggles of workers outside the factories is a predictable result of the reformist viewpoints and methodologies prevalent in conventional analyses of the history of labour movements . This notwithstanding, there is no reason why such viewpoints and methodologies, however imperfect they may be, should prevent one from looking into the political significance of the street demonstrations which labour unions staged with the major purpose of winning legal assurance of the unions' very existence or improvements in working conditions through legislation . It should also be noted that in the period of crisis that immediately followed Japan's defeat in the war, workers' organisations themselves viewed the overthrow of the pre-existing economic and social orders as one of their major strategic goals; thus, any attempt at analysing labour movements in such a crisis period will be incomplete as long as it neglects as trivial the movements' dynamic thrust out of the factory and into the street .[4] With this basic premise in mind, the analysis in this article will be carried out in the following manner . Firstly, major `mass demonstration' movements that occurred from August 1945 (both before and after Japan's defeat) through May 1946 will be summarised in the form of a table (pp . ), and will be grouped into three stages . Then, one typical movement in each stage will be chosen and its basic characteristics-e .g ., slogans, structural setup, and behaviour-will be scrutinised in some detail . Finally, the significance as well as the limitations of the `mass demonstration'



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movements of this period will be examined in relation to MacArthur's May 20, 1946 warning against mass violence .

Periodisation

Before making an inquiry into the `mass demonstration' movements of the period between the defeat of Japanese imperialism in August 1945 and the GHQ promulgation of the warning against mass violence on May 20, 1946, let us first review some of the major `mass demonstration' movements of this period listed in the table below . As clearly shown in the table, the period of the enormous development of `mass demonstration' movements can be further divided into four sub-periods . The first sub-period, which I call the preparatory stage, extends from just prior to Japan's defeat in WWII to the October 19 mass rally for welcoming liberation movement comrades freed from jails on October 10 . Despite the undeniably vital importance this period had in determining the fate of postwar social revolution, the Japanese working class in this period remained inactive, failing to take significant actions of any sort . The first revolts against Japanese imperialism from within were staged not by Japanese workers but by Chinese and Koreans forcibly brought to Japan as cheap and expendable labour . Important examples of this type of revolt include : the uprising at Hanaoka Mine, Akita, by Chinese workers (June 30-July 1, 1945, approximately 800 participants), the series of uprisings by both Chinese and Korean workers at various coal mines in Bibai, Hokkaido area (on September 18, 1945, some 260 Chinese workers rose up in revolt at Mitsubishi's Bibai Coal Mine, and were immediately joined by about 2,800 Korean workers ; on the following day, operations at Mitsui's Bibai Coal Mine were disrupted by about 430 Chinese workers ; and on September 24, 200 more Chinese stood up in revolt in Mitsubishi's Oyubari Coal Mine) ; and the movement for release of political prisoners under Korean leadership . These offensives staged by Chinese and Korean workers, however, are not within the scope of this paper but constitute a topic for a separate study .[51 The second sub-period extends from October 1945 through January 21, 1946, when goods hoarded at the Army's arsenal in Itabashi, Tokyo, were uncovered . I shall call this period the first stage because it is here that Japanese workers, under the leadership of the freed political prisoners, began to stage what can be genuinely called mass movements of their own . Among others which took place in this period two actions are especially noteworthy : one is the rally/demonstration in support of the struggle at the Yomiuri Newspaper, the first in the series of struggles for `workers' production control' fought in postwar Japan ; the other is the uncovering of hoarded goods which took place rather spontaneously, stirred up by the overall social climate of the period .



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9

The third sub-period, which is called the second stage in the table, covers a series of events from the January 26, 1946, National Rally to Welcome Home Nosaka Sanzo from Exile to the April 7 People's Rally for Overthrow of the Shidehara Cabinet . The characteristic feature of this second stage, when, on the one hand, the movement leaders set forth the tactics of forming a unified popular front, while on the other hand, the rulers moved to consolidate the framework of parliamentary democracy through general elections, is that in this period the `mass demonstration' movements began to gather momentum by joining forces with workers' struggles for `production control' . The fourth sub-period begins with the April 1946 Workers' Rally to Unconditionally Oppose the Suppression of Production Control, includes the May 1, 1946 May Day Rally and concludes with the May 19 `May Day for Food' . In this third stage, the `mass demonstration' movements, in combination with workers' struggles for `production control', took the greatest step forward in all of the four stages as a mass of people joined the ranks pressing for the `control of food by the people', the prevention of the Yoshida Cabinet's coming into power, and the 'establishment of a people's democratic government' . The crisis created by these movements reached such dimensions as to leave Japan without a cabinet for one full month ; it went so far as to threaten the whole scheme for capitalist reconstruction of postwar Japan . The huge crisis was overcome only by the high-handed warning against mass violence issued by the GHQ .

NOTES

a

b

The table above has been tabulated mainly on the basis of the Ministry of Labour, ed ., Shiryo Rodo Undo-shi : Showa 20-21 nen (Materials having to do with the History of Labour Movements : the 20th and 21st Years of Showa), Rodo Gyosei Kenkyujo (Institute of Labour Administration), 1951 . Each date stands for the one on which the action or event concerned took place or was initiated .

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Major `Mass Demonstration' Movements (June 1945-May 1946)(a) Date (b)

Name of Rally or Action

Sponsoring & Participating Organisations

Estimated Number of Participants

PREPARATORY STAGE June 30, '45

Chinese uprising at Hanaoka Mine (Kajima-gumi)

Chinese workers forcibly brought to Japan

800

Sept. 18, '45

Chinese and Korean workers' uprisings at Bibai coal mines

Chinese and Korean workers forcibly brought to Japan

3,500

Oct . 3, '45

Movement to free Committee for Movement to political prisoners Free Political Prisoners (an organisation of Koreans)

Several repr tatives

Oct . 10, '45

People's Rally to Committee for Movement to Welcome the Freed Free Political Prisoners, and Liberation Fighters Liberal Bar Association

1,000

Oct . 19, '45

Mass Rally to Welcome the Comrades Released from Prisons

15,000

Osaka Chapter of the Association to Free Korean Political Prisoners and other organisations

THE FIRST STAGE Nov. 10, '45

Speech Rally to National Federation of Press Support the Workers' Unions Struggle at the Yomiuri Newspaper

2,000

Jan . 21 . '46

Uncovering of goods hoarded at Itabashi Arsenal

2,000

Food Control Committee (consisting mostly of the arsenal's former employees)

MASS DEMONSTRATION' IN JAPAN

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.ocation (c)

Demands Raised and Actions Taken

lanaoka (Akita)

Under the leadership of Kuomintang prisoners of war, the revolting Chinese attempted to steal weapons, to hide out in the mountains and to stage a `guerrilla war' from there 'in concert with our regulars when they land in Japan in the future' ; but the attempt was abortive .

libai Oyubari ;both Hokkaido)

Led by Eighth Route Army officers, the Chinese prisoners of war acted 'in accordance with the military disciplines of the Eighth Route Army', demanded an increase in food rations, supplies of clothing and the lifting of the curfew, inflicted `punishment' upon the Japanese supervisors who had treated them cruelly during the war, and, in close co-operation with the Chinese prisoners of war who rebelled at Mitsubishi's Oyubari Coal Mine, created a state of `lawlessness' which lasted till the end of October .

N uchu Prison ;Tokyo)

With the demand for release of political prisoners, some members from the Committee visited Tokuda Kyuichi and other prisoners held in Fuchu Prison .

likokan Hall ;Tokyo)

After the rally to celebrate the release of 12 leaders of the Communist Party of Japan (CPJ), the participants marched to the GHQ ; the demonstration `dispersed after shouts of "banzai!" in front of the GHQ .'

Nakanoshima Park (Osaka)

After a rally advocating the establishment of the People's Republics of Korea and Japan, the participants took to the streets ; after three cheers of `hail to Gen . MacArthur', with Tokuda leading, the demonstration dispersed 'in front of the Headquarters of the Occupation forces' .

Hibiya Small Music Hall (Tokyo)

After a rally, the participants demonstrated at the Yomiuri Shim bun Press, where they handed a letter of protest to Shoriki, the newspaper's president .

Itabashi Arsenal (Tokyo)

Ex-Major General Kobayashi Gunji, the arsenal's general supervisor, was forced to 'hand over' to the Committee 750 bags of soya beans and other goods .



12 Date (b)

CAPITAL & CLASS 12 Name of Rally or Action

Sponsoring & Participating Organisations

Estimated Number of Participant :

THE SECOND STAGE Jan . 26, '46

National Rally to Welcome Home Nosaka Sanzo from Exile

Yamakawa Hitoshi, Arahata Kanson, Socialist Party, Communist Party and others

50,000

Feb . 4, '46

Demonstration to oppose the 'Four Ministers' Statement

Union of Workers at Nippon Kokan Kaisha's Tsurumi Steel Works

not availablF

Feb . 11, '46

Founding Meeting of the 'Kanto Democratic Council on Food'

Employees' Association of the 500 represei Ministry of Agriculture and tatives from i and Forestry, Kanto Council organisation of Trade Unions, Pressworkers' Union, the Japanese Federation of Labour, Japan Association of Farmers, Japan Federation of Co-operatives, and others

Mar . 27, '46 Negotiations on the payment for coal

Japan Coal Mine Workers Union, National Union of Coal Mine Workers, Kanto Council of Trade Unions, Pressworkers' Union, National Federation of Industrial Organisations (Preparatory)

400

Apr . 7, '46

Various democratic organisat ions and the People's Federation of Japan

70,000

People's Rally for the Overthrow of the Shidehara Cabinet

'MASS DEMONSTRAT ION' IN JAPAN

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'ocation (c)

Demands Raised and Actions Taken

Iibiya Park Tokyo)

After a rally in which Nosaka advocated formation of a 'democratic front', approximately 20,000 participants took to the streets and encircled the official residence of the Prime Minister . Some representatives met with the Director General of the Cabinet Legislation Bureau and demanded the release of those arrested in the Itabashi Incident, the dismissal from office of the Chief Commissioner of the Metropolitan Police and the mass resignation of the Shidehara Cabinet .

linistry of nterior, Official :.esidence of the 'rime Minister both Tokyo)

The participants made a protest to the Ministers of the Interior, of Welfare, and of Commerce and Industry . The Minister of Commerce and Industry responded by saying that `the statement was issued at the request of Nippon Kokan Kaisha's president Asano' .

auditorium of he Ministry of agriculture and Iorestry (Tokyo)

The movement's policy as well as regulations were decided upon ; Suzuki Tomin was elected as Chairman of the Council .

:oal Agency Tokyo)

The demonstrators `resolutely confronted' the Director General of the Coal Agency and compelled him to pay the bill for coal purchased to the workers in control of production .

Iibiya Park Tokyo)

After the rally (from 1 .00pm to 3 .00pm), tens of thousands of demonstrators rushed to the official residence of the Prime Minister and some of them proceeded through the gate . The police fired warning shots but had their guns snatched away and were beaten up by the demonstrators . At that point, the Occupation Force Military Police (MPs) intervened . While the demonstrators held a rally outside the gate, the chief secretary promised them that Premier Shidehara would meet with some of their representatives on the following day . The demonstration dispersed at 6 .00pm .



14

CAPITAL & CLASS 12 Name of Rally or Action

Sponsoring & Participating Organisations

Estimated Number of i Participant

Apr. 12, '46

Workers' Rally to Unconditionally Oppose the Suppression of Production Control of Workers

38 unions including those at Toshiba Rolling Stock Mfg ., and Edogawa Industry as well as Japan Coal Mine Workers' Union

7,000

Apr . 24, '46

Founding Meeting The same as above plus 2 of the `Committee additional unions for the Struggle Against Suppression of Workers' Production Control

300

Apr. 27, '46

Rally to Force Solution to the Food Crisis

Kanto Democratic Council on Food, Workers' Union of Japan Radio Co ., Shimouma Collective for New Life etc .

600

Apr . 30, '46

Demonstration to demand food was staged by citizens of Futamatagawa, Yokohama

Citizens of Futamatagawa, Hodogaya-ku, Yokohama

1,000

May 1,'46

May Day

May Day Steering Committee of Tokyo (consisting of the Federation of Transportation Workers' Unions, Japanese Federation of Labour, Kanto Council of Trade Unions, Association of Koreans, etc .

500,000 (1 .25 mill . throughout country)

May 7, '46

Rally of Workers and Citizens of Kawasaki

Unionists at Toshiba's Horikawa-cho Factory and `ordinary citizens'

May 12, '46

`Give Us Rice' Rally by the Cititizens of Setagaya

Trade Unions in Setagaya, 1,000 members of town block associations, persons affiliated with the CPJ organ Akahata

Date (b)

THE THIRD STAGE

'MASS DEMONSTRATION' IN JAPAN

15

ocation (c)

Demands Raised and Actions Taken

alace Plaza Iinistries of ;ommerce and adustry and of 'ransportation Tokyo)

A demonstration was held after the rally . The Minister of Commerce and Industry was forced to agree that the issue of the payment of the bill for coal produced at Takahagi Coal Mine under workers' control `should be settled by the parties concerned' . Another set of negotiations was held between demonstrators and the Vice-minister of Transportation concerning the payment of the bill for locomotives produced at Toshiba Rolling Stock Mfg . Co ., also under workers' control .

.yobashi Public .all (Tokyo)

`The Program of the Committee for Struggle Against Suppression of Workers' Production Control' was adopted, and the committee's organisational structure was consolidated .

radakura Gate laza, Metropoliin Office (Tokyo)

After a rally, the participants staged a demonstration, filed a note of protest with a deputy chief of the Tokyo Metropolitan Government, and demanded the `release of emergency rice' .

[odogaya Prefectral Office of .anagawa (Yokoama, Kanagawa)

With flags made of straw-mats in hand, demonstrators stormed to the prefectural office of Kanagawa, and managed to obtain consent from the Chief of the Department of the Interior that the prefectural government would hand out 500 bags of emergency crackers and a four days' ration of rice by May 3 .

alace Plaza Pokyo)

A 23-point resolution which called for, among other things, the establishment of a `people's democratic government', the `purging of war criminals', the `control of food by the people', 'unconcitional opposition to the suppression of workers' control', was adopted . A demonstration was held after the rally .

'ity Hall of ,awasaki Kanagawa)

Demanding the `immediate improvement of the delayed and deteriorated staple foods distribution system' the demonstrators marched to the City Hall of Kawasaki, where they managed to force the city authorities to give them some rolls .

[himouma ;ollective for few Life mperial Palace Tokyo)

After a rally, the participants marched to the Emperor's Palace accompanied by 2 trucks . 113 representatives entered the palace and demanded an interview with the Emperor . On the evening of the same day, the group milled into the Setagaya warehouse of the Food Corporation, where they `found 30 bags of wheat, 300 bags of bread and some other items not officially registered', and distributed them through the Setagaya Citizens' Food Control Committee .



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Date (b)

Name of Rally or Action

Sponsoring & Participating Organisations

Estimated Number of Participants

May 12,'46

Seizure of Ration Rice at the Yakuoji Ration Centre, Ushigome

Members of the 32nd Town Block Association of Kagamachi Ushigome-ku

120

May 14,'46

`Give Us Rice' Rally by the Citizens of Setagaya

CPJ members, Setagaya Citizens' Committee for Food Control, unionists at Toho Cinema Co . and the Metropolitan Transportation Workers' Union

800

May 19, '46

People's Rally to Secure Rice ('May Day for Food Offensive')

Committee of Mediators for the United Labour Front (consisting of representatives from Kanto Council of Trade Unions, Japanese Federation of Labour, Kanto Democratic Council on Food, etc .)

250,000

In the following sections, we shall deal more closely with each of the three stages of `mass demonstration' movements .

Uncovering of goods hoarded at the Itabashi arsenal, Tokyo (January 21 . 1946)

The uncovering of goods hoarded at what used to be the Army's First Arsenal in Itabashi, Tokyo, on January 21, 1946, is a typical example of the first stage of `mass demonstration' movements (from the end of WWII through to the end of January 1946)-in that the process by which organisations started spontaneously by the Japanese working class in various local residential areas came to revolt more consciously against the state power . This incident took place against the background of the immediate aftermath of the war in which the masses of people, driven to desperation by political and economic disorder, an extremely aggravated food situation, a shortage of necessities, and skyrocketing inflation, were becoming more and more inclined to loot, steal and illegally distribute hoarded goods in a reckless effort at revenge . In fact, the incident was nothing other than one that was carried out with the definite idea of turning these reckless attempts at revolt into more organised attempts under the policy of `uncovering of hoarded goods' and `control of food by the people' set forth by

MASS DEMONSTRATION' IN JAPAN ocation (c)

17

Demands Raised and Actions Taken

rakuoji Rice When 10 local community leaders visited the ration centre to tation Centre negotiate, a group of about 100 citizens in the neighbourhood heard the news of this and also stormed the centre with ration Tokyo) ticket books in hand, and managed to obtain a ration of 1 kg of rice per family . n front of the 'alace's 'akashita Gate Tokyo)

This rally was also attended by representatives of the Prefectural Councils of Trade Unions of Kanagawa and Saitama . After the rally, 5 representatives met with the manager of the general affairs section of the Imperial Household Agency and demanded an interview with the Emperor .

'alace Plaza Tokyo)

A rally and demonstration were called under the slogans 'Let us eat at least what we need to work!' 'Place all food under the control of the people!' and 'Overthrow the reactionary government, establish a democratic government!' . Representatives were sent to the Imperial Palace, the official residence of the Prime Minister, and the Metropolitan Police Office to deliver a list of demands . Tokuda Kyuichi, Takano Minoru, Suzuki Tomin and others who visited the Prime Minister's residence stayed there overnight to dramatise their demand that Premier Yoshida should stop trying to organise a new cabinet . The next day, following the announcement by MacArthur of the warning against mass demonstration, they left peacefully .

the Communist Party of Japan (CPJ) . The first thing to be pointed out about the Itabashi incident is that it clearly reveals the extreme weakness of the old system of control after Japan's defeat . In the course of dismantling the structure of military production after the war, the government hastily sold large amounts of steel, textiles, lumber, oil and fats and many other essential materials to the private companies having ties with it for a song . At the same time, the corrupt elements among the fomer ruling class hoarded and illegally distributed enormous amounts of food and other materials for their own profit . Moreover, all these evil-doings went unpunished . In a situation such as this, any attempt to force the ruled class to bear all the burden of preserving the pre-existing economic order alone would have been a failure . This explains why the 'uncovering of hoarded goods' happened as a spontaneous act in which groups of members of the ruled class simply started to walk away with hoarded goods . How such spontaneous action took place is evident in the developments that led to the Itabashi incident . Since September 1945, the 'enormous amounts of military goods' that filled the arsenal's 15 warehouses began to be 'taken away

C 12 3

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CAPITAL & CLASS 12 bit by bit at frequent intervals' and the stolen goods were 'dis posed of freely' by `members of town block associations' in the, arsenal's neighbourhood, or `resold' by community bosses .[6]I `If I alone don't steal, I'll make a fool of myself' was the atti-i tude that swept the surrounding area .[ 7 ] Even the Chief of the, Peace Preservation Division at the Metropolitan Police Offices lamented by saying that "There are simply so many cases of theft that we cannot mete out legal punishment to each and every thief' .[81 In a situation where members of the former ruling class were vigorously carrying out illegal distribution and usurpation of, hoarded goods, and where the machinery of control to check) these evil-doings was completely paralysed, it was quite natural that the masses, hard pressed by shortages and the inflation, should also feel justified to start removing, consuming and black marketing the hoarded goods . But this fact immediately brings to mind the second aspects of the incident . The spontaneous act of stealing hoarded goods,, unless properly checked, would soon begin to corrupt the very) people who are engaged in these activities ; these people must bei organised into a well-defined movement for destroying the, existing social order . With such a goal in mind, the CPJ, which) had adopted the policy for `uncovering hoarded goods' and) `increased supply of rationed materials under the democratic control by the people' at the occasion of its national congress oni November 8, 1945,[9] began to stage a struggle for uncovering) hoarded goods . The Itabashi incident is a typical example of thisi struggle at its earliest stage . In the wake of Japan's defeat in thei war, Tokyo Army Arsenal fired 20,000 workers en masse, there i subsequently occurred a dispute centring on the issue of the payment of retirement allowances to fired workers . A meeting held) on December 14, 1945, `to discuss how to cope with the situa-i tion' was attended by `workers and relatives totalling 800' .[10]' At the Fourth Mass Meeting of the Fired Employees on December 24, the workers resolved to hold a demonstration aimed at the Ministry of Finance and to make `direct negotiations' with the Finance Minister; they immediately put this resolution into effect and carried out their demands by compelling Finance Minister Shibusawa to sign an agreement of `immediate payment of the retirement allowances' . It was a CPJ member, Iwata Eiichi, who led the 300 workers and housewives in the struggle of the day . Also at a rally held in a large conference room inside the Finance Ministry, the leaders took turns fiercely denouncing the `total incompetence of the government', the `cold treatment' the arsenal was giving to the workers, and the `deception and evil-doing committed by corrupt military officers' .[11] In the process of this struggle, and under the leadership of Iwata Eiichi and other CPJ members, an organisation called the `Livelihood Defense League' (later renamed the `Food Control Committee') was brought into existence with workers retired from the arsenal forming its core membership . By means of this organisation, the movement for

CAPITAL & CLASS 12

19

uncovering hoarded goods became more disciplined and systematic . The third feature of the incident is the mass bargaining between the participants (between 2,000 and 3,000) and exArmy General Kobayashi Gunji, the arsenal's superintendent . on January 21, 1946 . The bargaining was carried out in the following manner . a: Under the guidance of Iwata Eiichi, the `Livelihood Defense League' of the former employees at the Army arsenal including Sato Yoichi, Yonekawa Minoru and Yoshida Minoru, sponsored a lecture meeting at Takinogawa Nishi Primary School on January 20, 1946, where a new organisation, the `Food Control Committee', was launched to replace the league . b : On January 21, the Committee mobilised `approximately 2,000 residents of the nearby wards of Takinogawa, Itabashi, Oji and Toshima' consisting mostly of the former employees of the arsenal in an offensive to uncover the goods hoarded in the arsenal's warehouses. Carrying signboards with a variety of demands such as `Give us jobs, food and houses!', `Kick out the military men, send them to coal mines!' and `People's control over distribution of rationed food!', the demonstrators stormed to the arsenal's warehouses . c: The crowd, led by Iwata Eiichi, Yoshida Minoru and others, ordered ex-Army General Kobayashi Gunji to climb up onto the bed of a truck which was being used as a platform, and fired questions at him continuously from 2 .00pm to about 7 .00pm . Iwata and others `stirred up a feeling of hatred and revulsion toward Kobayashi among the crowd' . The crowd, on its own part, responded with shouts of abusive language and condemnation : `Hey, you sneaky military chap, don't waste any more time!', `Let's do away with him!' . `Down with Kobayashi!', `Make him learn how to behave himself!' Finally, Kobayashi was forced to `hand over' to the Food Control Committee `750 bags of soya beans and other materials' .[ 12] Though the mass bargaining was carried out with a certain degree of restraint and was brought to an end with the `transfer' of hoarded goods, it would have lasted much longer had Kobayashi kept refusing to accept the demands . His chance of being rescued by the police was virtually non-existent . The discipline which reigned in this situation was something foreign to a food riot . It was also completely different from the type of discipline maintained by the previously enforced legal order . It was something that could occur only in a body of mass bargaining participants who were led by strong leaders . The fourth point worthy of note about the indicent is that the very manner in which the uncovering of hoarded goods was carried out under the leadership of CPJ members has both positive and negative implications . This is due to the fact that, on the one hand, emphasis on systematic planning in the promotion

20

CAPITAL & CLASS 12 of a spontaneously started mass movement certainly can help a movement to define its purpose and direction, and create a source of discipline and continuity, but on the other hand such an emphasis might well nip in the bud the vigorous and explosive power inherent in the mass movement before it can express itself . Thus, it is important to clarify what sort of purpose and directions and what sort of discipline and driving momentum the systematic planning-oriented leaders were contributing to the movement . Ins order to clarify this point, I would like to call attention to the , following fact . When a crowd of about 3,000 beseiged the arsenal) for the third consecutive day on January 23, there were some signs of `imminent danger of a riot' taking place . At this points some executive officials of the CPJ including Shiga Yoshio rushedi to the scene from the Party's headquarters . They pleaded withi the masses to abstain from `taking arbitrary actions' but instead) to `count on the ability of an organisation to make negotiations with the government and to distribute whatever they get equally among themselves' . The masses accepted this argument and) formed four Citizens' Ad Hoc Committees for Food Control (one each for Itabashi, Oji, Takinogawa and Toshima Wards) by choosing representatives . In response to these developments, the Tokyo Metropolitan Government on January 25 quickly movedi to act in compliance with the `decision reached by the government' : it mobilised a `300-man armed police force', transferred) the remaining foodstuffs to a Food Corporation's warehouse, and placed them under its own control . On the same day, two of the , leaders, Sato Yoichi and Yoshida Minoru (both CPJ members)„ were arrested by the Metropolitan Police on charges of 'blackmailing', and the movement was brought to a standstill .[ 131 As mentioned already, the movement to uncover goods hoarded at the Itabashi Arsenal was an outgrowth of more spontaneous actions to loot hoarded goods which were started by the , masses of people in a desperate response to the paralysis that) gripped the pre-existing legal and economic orders in the wake of Japan's defeat in WWII . The Itabashi incident was an attempt I made by the working class under the leadership of the CPJ to i organise these spontaneous actions of revolt into one largeri movement with a well-defined purpose as well as a systematically , constructed structure . There can be no denying that this incident acted as the springboard that made possible the formation on i February 11 of the Kanto Democratic Council on Food (made up i of more than 300 participating organisations with a total ) membership of 1 .5 million and with Suzuki Tomin, chairman of the union of workers at the Yomiuri newspaper, assuming the chairmanship) . Nonetheless, it cannot be denied that this movement failed to go all the way in channelling and giving proper expression to the immense energy of the masses, which was demonstrated when they created `imminent danger of a riot' . This last fact seems to point to the difference between the attitude taken by medium and lower ranking Communist Party members such as Iwata Eiichi who tried to lead the movement without

'MASS DEMONSTRATION' IN JAPAN

21

losing close ties with the working masses, on the one hand, and that held by the Party's top executives including Shiga Yoshio who purported to bring the movement in line with the strategy of a popular democratic front, on the other . From January 25, the uncovering of hoarded good actions started to change their character : previously they were actions directly carried out from below by the masses ; thereafter, it was carried out from above by the state power for its own purpose . It was not until the end of April 1946, that the movement for `people's control over food' began to gain significant momentum again . People's rally for overthrow of the Shidehara Cabinet (April 7, 1946)

The second stage of `mass demonstration' movements is from the January 26, 1946, National Rally to Welcome Home Nosaka Sanzo from Exile to the April 7, 1946, People's Rally for Overthrow of the Shidehara Cabinet . What is significant about the `mass demonstration' movements of this period is that here the Japanese working class first made its appearance in the arena of politics on a full scale . The first sign of this new trend became evident in the drive to form a `democratic popular front' . Also, the overall political situation of this period was coming to be centred more closely around the first post-war general election scheduled for April 10, and thus increasingly restricted by the framework of parliamentary democracy . The CPJ, too, explicitly laid down in the Declaration issued at its Fifth National Congress of February 25 the strategy and tactics to be adopted in achieving a `bourgeois democratic revolution' under the occupation . All these notwithstanding, the movement carried out in this period by the working class was by no means brought under the control of bourgeois democratic politics which alleges that balloting in a general election is one and the same thing as popular participation in politics. An eloquent proof of this lies in the fact that the demonstration for overthrow of the cabinet was joined by as many as 70,000 participants, and in the fact that the demonstrators, far from being scared by the warning shots from the police, forced their way through the police cordon and came close to occupying the Prime Minister's official residence . The first thing to be noted about the mass demonstration for overthrow of the Shidehara cabinet on April 7, 1946, is that the decision to hold it as `the first action of the popular front'[14] was made at the April 3 Mass Meeting to Prepare for the Formation of the Democratic People's League . The decision was made when the election campaign was in its final stages, since it was March 10 when April 10 was officially announced as election day . In other words, the April 7 mass rally was planned as part of lastminute election campaign activities . Although the mass rally was called under the unified political slogan, `Down with the reactionary Shidehara Cabinet!',[15] its interpretation varied from one leader of the rally to another . Suzuki Mosaburo of the Socialist Party (Left) addressed the rally that `after the election' his party would never `take part in the coalition of reactionary

22

CAPITAL & CLASS 12 parties' but instead would keep fighting for the establishment of a `people's cabinet' . Nosaka Sanzo of the CPJ, who took the platform after Suzuki, advocated the idea of staging a `nation-wide general strike' as a tactic for overthrowing the reactionary forces and stressed the formation of `militant labour unions' on the national, industrial and company levels as a vital prerequisite to staging such an offensive . Finally, Tokuda Kyuichi of the CPJ addressed himself to the importance of `workers' production control' and agitated : `Let us besiege the Prime Minister's official residence!'[16] The second point of importance concerning the April 7 mass rally is in the manner in which the massive demonstration by tens of thousands of people was carried out . a:

b:

c:

At 1 .00pm, April 7, the total number of participants in the rally was approximately 70,000-i .e . 20,000 unionists affiliated with the Kanto Council of Trade Unions, 5,000 workers from the Japanese Federation of Labour, 30,000 organised workers from various other labour organisations, 20,000 members of the Federation of Koreans in Japan, and 20,000 ordinary citizens including members of various cultural organisations . At 3 .00pm, after the rally had ended, more than 50,000 organised workers marched to the Prime Minister's official residence, broke through the cordon of 300 policemen (including 50 who were armed with shotguns), and started to `mill into' an open space inside the gate . At that moment a total of `18 warning shots' were fired by about a dozen policemen, and this gave rise to `utter confusion' . The masses gave a policeman named Uchida and others a `sound thrashing', and `snatched away their shotguns' . The police force retreated at the demand of the demonstration leaders . Before long, US military jeeps arrived at the scene . 6 MPs started `hitting the crowd of people on the buttocks and the back with clubs', and pushed them out of the gate . The marchers held a rally outside the gate, while 13 of their representatives (including Tokuda Kyuichi, Arahata Kanson and Suzuki Tomin) went inside the official residence and met with vice-chief secretary Kiuchi . The representatives read out the resolution adopted at the mass rally and demanded that the Prime Minister see them in person . Meanwhile, outside the official residence, `6 armoured cars of the US military and 6 MP jeeps moved in and gradually dispersed the crowd away from the gate' . Brigadier-General Hugh Hoffman of the First Cavalry Division arrived by car and subsequently left the scene after receiving a report that order had been restored . As a result of the negotiations inside the official residence, it was finally agreed that the Prime Minister would meet with the 13 representatives on the following day at 4 .00pm in his official residence . Vice-chief secretary Kiuchi `made a statement to this effect to the crowd' . The `crowd numbering tens of thousands sang loudly the song of Akahata, gave

MASS DEMONSTRATION' IN JAPAN

23

several roars of "Down with the Shidehara Cabinet!" in unison', and dispersed at around 6 .00pm . d : On April 8, 12 representatives including Tokuda Kyuichi and Suzuki Tomin held negotiations with Premier Shidehara in his official residence, and demanded that he resign immediately . After about one hour of negotiations, Shidehara left the room of the meeting escorted by his guard .[17] The following four points are worth noting here . (1) On April 7, when the planned general election was close at hand, the Japanese working class chose to stage such a massive demonstration not to demand replacement of the cabinet through an election, but instead, through immediate overthrow of the Shidehara Cabinet, and furthermore the radicalism shown by the workers in this action was far in excess of the expectations previously held by the Democratic People's League . (2) Though the Japanese police attempted to scare off the huge numbers of demonstrators by firing warning shots, this attempt proved a complete failure-they had their shot-guns taken away and their utter incompetence was revealed . (3) This state of lawlessness was brought to an end only by the intervention of the MPs and armoured cars of the US occupation forces. (4) On the following day, only 12 leaders held negotiations with Prime Minister Shidehara, and did so without mobilising the masses to support them while they were at the bargaining table . The third point to be noted is that these mass demonstrations had one major drawback . In contrast to the working class, which, in carrying out the demonstration, managed to go beyond the expectation of the Democratic People's League and confronted the nucleus of the government directly, the demonstrations' leaders failed to make the most effective possible use of this massive pressure . It is certainly true that, at the time of intervention by the MPs on April 7, Arahata Kanson expressed 'objection' to the MPs, and Tokuda Kyuichi, in response to the MPs' demand that the leaders should `order the crowd to disperse' insisted that `That's out of the question' . It is also true that while the ruling class found its `last resort in the MPs', Tokuda had his `in the masses' .[18] But in spite of all this, the following day, only twelve representatives made their appearance at the meeting with Prime Minister Shidehara, without mobilising the masses to the site of negotiation . This was indeed a grave mistake which any `mass demonstration' movement should have avoided at all costs, because a handful of representatives are but a small group of powerless individuals unless they are backed up by large numbers of people ready to employ force whenever necessary . This failure on the part of Tokuda and other leaders to properly channel the energy of the masses can be explained, at least partially, by the way they evaluated the situation ; they thought that the `US occupation forces' would be `opposed to any seditious acts of violence taking place' . It cannot be denied, however, that such assessment of the situation-i .e . the view that regards the US occupation forces as a `democratic force for liberation'-tended to

24

CAPITAL & CLASS 12

dominate the value judgement made by Tokuda and other leaders . It is only by understanding this fact that one can begin to see why Tokuda categorically called the forcible entrance into the Prime Minister's official residence compound which the demonstrators carried out en masse on April 7 an accident which happened as a result of the `agitation' and `provocation' on the part of the `police authorities' .[ 191 The April 7 mass rally also revealed one more fact, namely that from the very moment when a movement leader ceases to place full confidence in the power of the masses as the only basis for successful promotion of a movement, he inevitably starts seeing the greatest possibility in negotiations with the rulers carried out on their territory and on their terms in the absence of the masses . May day for food rally (May 19 (1946)

The third stage of `mass demonstration' movements begins with the April 12, 1946, `Workers' Rally to Oppose Unconditionally the Suppression of Production Control' and concludes with the May 19 `May Day for Food' . To summarise the characteristic features of the `mass demonstration' movements of this period, they were waged in close conjunction with workers' protest movements against suppression of production control by workers and thus centred mainly around the issue of food control by the people, and moreover, they were the largest and the most vigorous demonstrations that postwar Japan had yet seen in that the country was left without a cabinet for one month and the capital city was forced into a `state of quasi-anarchy'[20] by the sheer disruptive power of these demonstrations. As stated, the most important of these was the May 19, 1946, `May Day for Food' . In diametric opposition to the on-going programme of bringing Japan up into maturity as a bourgeois democratic state, a programme set forth by the Constituent Assembly immediately after the general election, the May Day for Food envisaged the establishment of a `people's government' built upon the foundations of `control of factories by the workers', `control of food by the people', and control of streets by the masses . For example, Suzuki Tomin, chairman of the Kanto Democratic Council on Food and one of the leaders who organised the event, stated in his address that `a revolution has now been started from struggles in the street' . Demonstrators carried signboards which said in large script `Food before the Constitution!'[21] In the first place it is important to pay sufficient attention to the major slogans around which the May Day for Food (People's Rally to Secure Rice) was carried out . There were three basic slogans which characterised this event' `Let us eat at least what we need to work!', `Place all the food under people's control!' and `Establish a people's government!'[22] What implication did each of these slogans have in actuality? The first slogan, `Let us eat at least what we need to work!', shows that the demonstration was a struggle waged by the working population for their very livelihood . The rice crop in the fiscal year 1945 turned out a serious failure and amounted to only 39,16 million koku

MASS DEMONSTRATION' IN JAPAN

25

(approximately 200 million bushels), an amount smaller by 35 .5% than the average for the five preceding years and the worst crop since 1906 . Moreover, barley, wheat and sweet potato crops in 1946 were estimated to fall short of the average level by approximately 40% each . To make the situation worse, the systems of compulsory food procurement and rationing crumbled, giving rise to soaring black market prices, and bringing the supply of vegetables and fish to a standstill . Distribution of staples was delayed by an average of 11 to 12 days in Tokyo as of May 19, and as long as 32 days in Sapporo at the end of April . In the period between May 11 and 25, the average daily calorie intake for a resident in Tokyo had reached a staggering low of 1,064 calories (723 calories from rationed food and the remainder from black market products) . (2,400 calories a day is regarded as the minimum necessary intake for a male adult engaged in a work of medium physical intensity .)[23] The food situation was indeed assuming the dimensions of `an actual famine', inducing the `working class consumers to feel the real threat of starving to death' .[24] Urban dwellers had only three alternatives to choose from . One was to abide strictly by the tremendously unstable systems of food rationing and food control, and to eventually starve to death . There was, in fact, one court judge who, in his effort to remain a loyal guardian of bourgeois law, refused to take any food purchased on the black market and thus died of hunger. The second alternative was to try to stay alive making long trips to the countryside to buy whatever one could get directly from farmers or by purchasing rice and potatoes on the black market . This second alternative, however, could only lead to a situation where `the rich get enough to eat' while the `masses of working people who cannot afford either money or the time to go to get food'[25] are forced to the `brink of death' by starvation . The remaining alternative, and in fact the only one that offered a viable way out of the grave situation for most people, was to stand up in a joint struggle for survival . This last choice had already been made by the occasion of the uncovering of goods hoarded at the Itabashi arsenal on January 21, 1946, as we have seen above . Since the end of April 1946, when the food situation started growing worse and worse, 'give-us-food' demonstrations, as shown in the Table above which lists only the major ones, took place almost every day, bringing Tokyo into a `state of quasi-anarchy' .[26] The May 19 demonstration for food was waged as a culmination of this series of struggles to get food . What aspect of the May Day for Food Offensive did the second slogan, `Place all the food under the people's control!' represent? As early as December 1, 1945, when the CPJ adopted a `Program of Actions' at its Fourth National Congress, it advocated `people's control over food and other necessities of life' along with `workers' control over key industries' and the `democratic procurement of rice through peasant committees' .[27 ] In the view of the CPJ, there were three major fronts in the period of post-

26

CAPITAL & CLASS 12 war crisis : the factories where workers should bring production under their own control through the medium of factory committees, the villages where peasants should gain control over they land and exercise democratic procurement of food throughi peasant committees, and the cities where people's committees should bring food under their own control . The struggle for people's control over food, including that for the uncovering of hoarded goods, was part and parcel of these nationwide struggles . As in the struggles being waged on the two other fronts, this intra-city struggle was aimed at permanently toppling the existing I structure of control as an important step towards the establishment of a new system of control under the direction of the masses. It may be said that regional organisations for people's food control were expected to form, in combination with those for workers' and peasants' production control, regional soviets in i their embryonic form . The third slogan of the May Day for Food Offensive advocated `opposition to the reactionary government' and the `establishment of a people's government'. Given the fact that the food crisis was created jointly by the political, economic and I social structures of Japan at that time, the real way out of the food crisis could be found only in the total dissolution of the now corrupt structures and their replacement by completely new , ones . The seizure of state power was essential also for the continued existence of regional soviets in their embryonic stage, a i necessary step toward achieving workers' control over factories and people's control over food . Moreover, the central government to be newly established should not be capitalist but, rather, socialist in its basic orientation . Nevertheless, the third slogan, in i advocating the establishment of a `democratic government', in i fact meant the `establishment of a democratic government with i the Socialist and the Communist Parties as its nucleus and with trade unions, peasant organisations and democratically-oriented I cultural associations as its basis' .[28] A `democratic government' designed to have as one of its major supports the Socialist Party, which looked at the general I election as a matter of established fact and busily engaged in i political manoeuvres within the framework of the existing political structure, would be nothing but a bourgeois democratic government . In this sense, the third slogan of the May Day for Food Rally was not completely consistent with the second slogan . This means that, as was the case with the `workers' production . control' struggles, the `mass demonstration' movements were at the crossroads between marching forward to a socialist revolution, a strategic goal consistent with `people's control over food', or falling back on the revisionist goal of `democratic revolution', giving up the idea of `people's control over food' and replacing it with a demand for increased distribution of food . The second point that needs to be investigated is the manner in which the May Day for Food Rally was organised . This event, which drew more than 250,000 participants, was held under the

MASS DEMONSTRATION' IN JAPAN

27

sponsorship of the `Committee of Mediators for the United Labour Front' . Although the Committee of Mediators was organised as a direct successor to the May Day Steering Committee, it differed from its predecessor in two respects . Firstly, the Kanto Democratic Council on Food came to take greater initiative within the committee relative to other constituent organisations . Secondly, the participants were mobilised through two differently-structured organisational channels . One channel was through various trade unions affiliated with such labour organisations as the Kanto Council of Trade Unions, the Japanese Federation of Labour and the National Federation of Industrial Organisations; and the other was by way of a number of `Citizens' Committees for Food Control' . Of these, whilst the Citizens' Committees for Food Control were basically characterised as organisations for food control by the working class, they can be further divided into two sub-types . On the one hand there were citizens' committees for food control which were organised on the local level, incorporating local groups of war sufferers, regional co-operatives, and groups of fired workers under the leadership of Communist Party members . On the other hand there were those in which factory workers' organisations under the leadership of Communist Party members were the major constituent, supplemented to some extent by ordinary community residents . Atypical example of the former is the Setagaya Citizens' Committee for Food Control in Setagaya, Tokyo, which was organised around the nucleus of the Shimouma Collective for New Life, an organisation of war sufferers under the leadership of Iwata Eiichi and other CPJ members, which sponsored a series of `Give Us Rice' rallies, in co-operation with unionists at Toho Cinema Co ., Tokyo Measuring Instruments Co ., Japan Radio Co . and the Metropolitan Transportation Workers' Union. A typical example of the latter type is an organisation which was composed mainly of several thousand unionists at Toshiba's Horikawa-cho Factory under the leadership of CPJ member Okazaki Yasuzo, (also a member of the Central Committee of Toshiba Workers' Union) which sponsored the `Rally of Workers and Citizens of Kawasaki' on May 7, 1946 . Thus the May Day for Food Offensive had, on the surface, two channels for mobilising the masses-organisations of trade unions and citizens' committees for food control . It is safe to say, however, that the mobilising efforts were really spearheaded by the workers' organisations for control of factories and those for food control which were respectively built around CPJ's infactory and community organisations . The third point needing attention is the behaviour of the Japanese working class during this event and the response of the Japanese ruling class and the US occupation forces. i Rally : At 10 .20am, May 19, 1946, the Palace Plaza in Tokyo was filled up by an immense crowd of workers and citizens . Indeed, the

28

CAPITAL & CLASS 12 series of `mass demonstration' movements waged in this perio( had tremendous powers of mobilisation ; the People's Rally fo . Overthrow of the Shidehara Cabinet on April 7 drew 70,000 participants, the Mayl May Day rally had 500 .000 participants in Tokyo alone, and the action on May 19 was attended bye 220,000 . At the rally, representatives from various participating, organisations, housewives and primary school children addressed the crowds . A resolution and a `memorial to the throne' were adopted incorporating the above-mentioned slogans as their keynotes; these were delivered to the Prime Minister's official) residence and to the Palace by groups of representatives . Signboards posted by workers at the rally bore such strong-worded) messages as `Food before the Constitution!' and `Chin (firsts person pronoun "I" used exclusively by the Emperor) am eating, enough ; you, the subjects, starve yourselves to death!'[291 It was 9 months after Japan's defeat in the war that the Japanese working class finally began to free itself from the spellbinding, ideology of the Emperor system, and to break out of the framework of parliamentary democracy . ii Demonstration : The demonstration on that day started a bit after 12 .00 noon and lasted until 2 .30pm . The demonstrators proceeded along a route that passed Hibiya, the Sakurada Gate, the Prime Minister'si official residence and Kasumigaseki and led to the Sakashita Gate Plaza, the point of dispersal . At first, the Prime Minster's official) residence was heavily guarded by a police cordon .[30] Judging, from the confrontation of April 7, however, it was clear that the Japanese police were quite powerless to cope with the 250,000 demonstrators . In a situation such as this, Yoshida Shigeru, who was in the process of organising a new cabinet, concealed himself, saying that he `had better not see them' .[31] The police inside the compound of the official residence gave up the idea of confronting the demonstrators. After a group of representatives entered the official residence demanding an interview with Yoshida Shigeru, approximately 50 able-bodied unionists took the place of the police and mounted a guard at the President's main gate . In this way, the Prime Minister's official residence was virtually seized by a group of demonstrators' representatives and their escorts . However, the rest of the 250,000 demonstrators `gave up the idea of entering' the official residence and marched past it . mainly because `a troop of MPs crowding four jeeps to full capacity' was standing guard inside the gate .[32] In every major demonstration since the April 7 People's Rally for Overthrow of the Shidehara Cabinet, the GHQ continually played an active part in dispersing crowds of demonstrators ; in this instance, too, it was forced to send MPs to the Prime Minister's official residence in order to protect the Japanese ruling class . It must be said, therefore, that in the period between April 7 and May 19, 1946, public peace was only maintained through the American MPs .

MASS DEMONSTRATION' IN JAPAN iii

29

Leadership :

`Mass demonstration' movement leaders such as Tokuda Kyuichi, Takano Minoru and Suzuki Tomin persistently tried to get to see Yoshida Shigeru, to thrust the resolution of the May Day for Food at him, and to persuade him to immediately stop organising his new cabinet . However, since Yoshida was nowhere to be found, they began a `sit-in' at 5 .40pm . By that time, leaders of the All Japan Government and Public Workers' Union and the National Railway Workers' Union had returned to the official residence together with a crowd of workers who had already finished the march, and surrounded the residence on all sides . At about 7 .00pm, one of Yoshida's aides told the participants in the sit-in that Yoshida had `given up the idea of organising a new cabinet', but they insisted on continuing the sitin, all night if need be, until Yoshida himself came to tell them that he had actually done this . In the course of the sit-in, it was reported that Yoshida twice made his appearance at the official residence of the Minister of Foreign Affairs, and each time the movement leaders hurriedly thronged to the Foreign Minister's official residence . This occurred first on the evening of May 19 and then at 6 .00 on the morning of May 20 . They were unable to see Yoshida both times, however . In the morning of May 20 . MacArthur issued a warning against mass violence, but it was not until after 4 .00pm that the participants in the sit-in left the residence . Prior to this they remained there supported by more than 2,000 unionists of the Tokyo Metropolitan Transportation Workers' Union, 200 members of the Japan Pressworkers' Union and others who thronged to the Prime Minister's residence for the second consecutive day . With the issuance of MacArthur's statement, however, Yoshida suddenly began to take an aloof posture, and refused to see them . Unable to see Yoshida, the movement leaders left the official residence after issuing a statement .[ 331

iv

Ruling Class :

Yoshida, who was in the process of forming a new cabinet, hid himself in an effort to evade direct confrontation with the demonstrators . Yoshida's brain trust met at Hatoyama Ichiro's residence with the purpose of working out a `strategy with which to cope with the pressure of the masses', but the impossible work came close to `exhausting the nerves of the politicians'[341 at the meeting . Under the pressure of this situation, and the difficulty of choosing the right person for the position of Minister of Agriculture and Forestry, Yoshida on the evening of May 19 briefly even abandoned the idea of forming a cabinet . Had it not been for the intervention of the US occupation forces, therefore, the Yoshida Cabinet would not have been formed because of the tremendous pressure put on him by the huge numbers of people who took part in the May Day for Food Rally, and a coalition government, centred around the Socialist and the Communist Parties, would have come into existence in-

30

CAPITAL & CLASS 12 stead . Upon its establishment, the coalition government might not have had socialism as its basic goal, since the political' consciousness of many of its leaders would cause them to choose a more moderate goal . However, since it would have been the product of workers' mass demonstration movements led by workers' production control organisations and by people's food control organisations and would have been won outside the framework of parliamentary democracy, such a coalition government, even if it had started with moderate policies at first, would have been driven more towards the left to keep pace with the advances made in production control by the working masses and in food control by the people in general . This was not the case, however, since Japanese capitalism was rescued at the last minute from the grasp of a revolutionary crisis by MacArthur's warning against mass demonstrations .

Significance In the preceding sections, we looked at how, in postwar Japan and limitations `mass demonstration' movements started, and with what kind of principles the CPJ tried to lead them and what features characterof the `mass demonstration' ised these movements at each stage of their development . In this concluding section I shall make a few observations about some of movements the important implications of the `mass demonstration' movements in the early postwar period . The first point needing clarification is the significance of MacArthur's warning on mass violence ; this warning decisively changed the whole course of development of workers' movements in the postwar period . The keynotes of MacArthur's statement issued on the morning of May 20, 1946, in the wake of the May 19 May Day for Food Rally boil down to the following three points . 1 The `mass demonstration' movements which culminated in the May Day for Food Offensive were being waged under the `organised leadership of Communists, and were showing a `growing tendency towards mass violence and physical processes of intimidation' . 2 This type of situation constituted `a menace not only to orderly government but to the basic purposes and security of the occupation itself'-i .e . a menace to the existing system of rule as a whole . 3 The occupation forces could not afford to allow these 'disorderly minorities' to exercise violence any longer . The occupation forces would resort to taking `the necessary steps to control and remedy such a deplorable situation' . [ 351 The view of the GHQ summarised above has the following characteristics. Firstly, the GHQ accurately understood that the upsurge of the `mass demonstration' movements was throwing Japan's ruling system into a crisis . Indeed this is exactly what gives the May Day for Food Rally, which is the apex of postwar `mass demonstration' movements, its historical significance . Secondly, the GHQ made clear that it was determined to restrict political participation of the Japanese working masses to the use



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of `rational freedom of democratic methods'-i,e, to limit them within the framework of parliamentary democracy-and that anybody who dared to go beyond this framework would be suppressed by whatever means necessary . This warning against mass violence marked a turning point in the policies of the occupation towards Japan . It was a shift away from the position the US specified in August 1945 in the statement, `US Policy toward Japan in the Aftermath of its Surrender', that the occupation forces, deeply interested in the `reformation of the feudalistic and absolutist tenacity' would abstain from intervention even if the `people of Japan should employ force' . This shift may be characterised not so much as a change in the basic orientation of the US occupation policies as a change in the assessment the occupation forces had of the situation in Japan ; they came to think that Japan, after the April 10 general election, had begun to make progress toward becoming a democratic country . Whatever the case may have been, the fact remains that, as of May 20, 1946, the GHQ made public for the first time its intention to directly confront the working masses of Japan who were trying to radically change Japanese society by waging struggles for `workers' production control' and `mass demonstration' movements . The second point to be kept in mind is that the Japanese working masses completely failed to make any efforts at resistance to the GHQ's high-handed warning against mass demonstrations . This failure brought the steady upsurge of movements in the postwar crisis period to an abrupt end . One question remains here, however : why is it that a single statement, though supported by the mighty arm of the occupation forces, could deal a fatal blow to the movements and force them to disappear from the scene for a time? In answering this question, it is especially important to take note of the serious mistakes made by the movements' leadership, especially by the CPJ, which had the strongest influence on the labour movement . The CPJ looked upon the occupation forces as `forces of liberation' .[36] and on this premise advocated trying to achieve a democratic revolution by peaceful means under the occupation . The CPJ, therefore, was not at all prepared either theoretically or organisationally to cope with suppressive measures employed by the occupation forces . All it did after the warning against mass violence was issued was to issue its own `statement', emphasising that the May Day for Food was an `orderly and welldisciplined' action of `trade unions' and not of a `violent mob' of `minor elements', and the responsibility for its occuring should lie with the `reactionary government' which invited the food crisis. Instead of re-evaluating the significance of the struggles for workers' control of production and for people's control of food which it had been leading up until that time, the CPJ confined itself to the framework of `rational freedom of democratic methods' as defined by the GHQ .[37] [38] Moreover, the failure to judge the true nature of the US

32

CAPITAL & CLASS 12 occupation forces was not the only mistake made by the CPJ . Its mistakes were also evident in such areas as struggles for workers' production control and for food control, the most urgent issues for the labour movement at that time ; by the time of its Fifth Congress in February 1946, the CPJ had taken a giant step backward from the position it previously adopted at its Fourth Congress in December 1945, a position which laid stress on `workers' control over industries' and `people's control over food' . In view of the fact that the working masses were working toward these goals in their actual struggles, there is no denying that the CPJ's level of guidance was falling far behind the developments which were actually taking place . Thirdly, it is important to keep in mind that the mistakes made by the labour movement leadership, in spite of their grave significance, cannot offer a complete explanation of why the movements suffered such a sudden decline following the May Day for Food Offensive . The setbacks suffered by the movement as a i whole were in the most profound sense, a reflection of the consciousness widely shared by the Japanese working masses . [391 On this point, it seems worthwhile to look briefly into the results of a survey carried out by the Social Science Research Group at the University of Tokyo in March 1946 concerning the political attitudes of the `extremely class-conscious modern factory workers' in the Tokyo area . The surveyors interviewed a total of 1 .375 workers and came up with the following conclusions . 1 Only 5 .2% of the workers surveyed supported the Shidehara Cabinet ; 60% opposed it . As many as 68 .4% were in favour of the formation of a `democratic popular front' . It is safe to say that the majority of workers in large factories regarded the `overthrow of the reactionary government' and `establishment of a democratic popular front' as the two most urgent political goals . 2 The workers were not so clear, however, about what policy this `democratic popular front' should aim at establishing . While 74 .9% felt that the `sovereignty should rest with the people' and 60 .9% thought that it `should not rest with the `Emperor', as many as 54 .9% were in favour of maintaining the `Emperor system' . This seems to show that the political consciousness of the progressive elements among the Japanese working class still remained at the stage of envisioning a constitutional monarchy built on the basis of a `democratic popular front' as an ideal form for the new political system to take . 3 With regard to the `administrative measures' being taken by the occupation forces, 46% supported them, 43 .1% thought them neither good nor bad, and only 8 .3% specifically opposed them . In other words, the majority of the Japanese workers accepted the Occupation policies either positively or passively . The survey was conducted in March 1946, so it is not hard to imagine that by May the workers' consciousnesses began to lean rapidly towards the left under the pressure of the tremendously volatile actual situations and of the continued upsurge in mass

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demonstrations, So far, no statistics are available to support this point . But the same survey reveals that in a 3-month period from December 1945 through March 1946 the workers' viewpoints made an aboutface. To cite a few examples, among Tokyo's streetcar drivers the percentage of CPJ-supporters increased 48 .5% to 94 .8%o and the percentage of those who supported the Emperor system dropped from 43.6% to zero, while among National Railways engineers the percentage of those who opposed the CPJ decreased from 79 .8% to 40 .8% and that of CPJ-supporters increased from 8 .7% to 29 .6% . There is good reason to suppose that in the months of April and May this trend of rapid radicalisation of the workers continued on at the same or, more likely, at an even more accelerated pace . At the same time, however, it is almost certain that even such a process of rapid radicalisation failed to change radically the view of Japanese workers toward the `Emperor system' or to make them critical of the occupation forces . These observations indicate that the drastic shift in occupation policies took place at a moment in time when the Japanese workers, who had started taking to the streets to fight for survival, were still in the process of radicalisation, they were yet to turn their still new experiences into lifetime attitudes and when they were yet to acquire a sufficiently critical view towards the policies of the occupation . In other words, workers' political consciousness was also falling far behind the rapid change in the actual situation . Fourthly, this ideological environment which surrounded the labour movement at that time had its historical roots in the concept that ever since the Great Depression of the 1930s, Japanese workers had been incorporated ideologically and systematically into the imperialist war machine . According to this concept, even if a country is defeated in an imperialist war, its working class, provided that it has been continuously struggling against the war while it was being fought, will be able to stand as a complete equal to the armed forces of the winning country, since in such a case only the ruling class of the defeated country loses the war. If, however, the working class of the defeated country . has been incorporated ideologically and systematically into the imperialist war machine, it too becomes a loser and will not be able to stand as an equal to the armed forces of the winning country . Placed in a historical perspective, therefore, the Japanese working class had no other choice but to accept the position of loser in its relationship to the occupying forces of US imperialism . This partly explains why the Japanese working class was u nable . to overcome the ideology of democratisation dictated by the US occupation forces . From the moment when the `vanguard party' of the working class looked upon such occupation forces as `forces of liberation', the postwar `mass demonstration' movements were destined to suffer such a major setback as the one they experienced following intervention by the occupation forces.

IC 12C

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CAPITAL & CLASS 12

FOOTNOTES

1

Yamamoto Kiyoshi, `The Production Control Struggle in th Period of Postwar Crisis', The Annals of the Institute o Social Science, No . 13, 1972 . 2 Okochi Kazuo, Nihon Shihonshugi to Rodo Monda, (Japanese Capitalism and Labour Problem), Hakujitsu-shoini 1974 . 3 Sumiya Mikio, Nihon Rodoundoshi (History of Labou . Movements in Japan), Yushindo, 1966 . 4 As for the general political situation in Japan in this period see Shinobu Seizaburo, Sengo Nihon Seijishi (History o' Postwar Japanese Politics), Keisoshobo, 1965 . 5 For descriptions of the Hanaoka Uprising, see Ishitobi Jin Chugoku jin Kyoseirenko no Kiroku : Hanaoka Bodo G Chushin to suru Hokoku (Records of Forced Migration ot, Chinese : A Report with an Emphasis on the Hanaoka Uprising), Taihei Shuppan, 1973, and Hiraoka Masaaki, ed . Chugoku jin wa Nihon de Nani o Saretaka : Chugoku jini Kyoseirenko no Kiroku (How were the Chinese Treated in Japan? A Record of Forced Migration of Chinese), Ushic Shuppansha, 1973 . For accounts of the Binai Uprisings, see Pak Kyong-sik, Chosenjin Kyoseirenko no Kiroku (A Record) of Forced Migration of Koreans), Mirai-sha, 1965, and) Mitsubishi Binai Tanko Rodo Kumiai (Workers' Union ofl Mitsubishi Bibai Coal Mine), Tanko ni Ikiru (Life and Labouri in a Coal Mine), Iwanami-shoten, 1960 . 6 The Asahi newspaper, February 10, 1946 . 7 An account by Mr . Oki Kametaro, Vice-President of Nerimai Kita 2-Chome Town Block Association, as quoted in Asahi, February 10, 1946 . 8 An account by Chief of the Peace Preservation Division of I the Metropolitan Police Office Nishimura, as quoted in Asahi, February 10, 1946 . 9 The Ministry of Labour, ed ., Shiryo Rodo Undo-shi: Showa i 20-21 nen (Materials having to do with the History of Labour Movements : the 20th and 21st Years of Showa ; hereinafter abbreviated as Shiryo), Rodo Gyosei Kenkyujo (Institute of Labour Administration), 1951, p . 903 . 10 The CPJ organ Akahata, No . 7, December 19, 1945 . 11 Akahata, No . 9, January 1, 1946 . 12 Saiko Saibansho Hanreishu (The Supreme Court Law Reports), Vol . 3, No . 6, pp . 779-81 . 13 Shiryo (op . Cit .), p .921 ; Asahi, January 26, 1946 ; and) Akahata, No . 17, February 18, 1946 . 14 Shiryo (op . cit.), p . 928 . 15 The `Resolution' adopted by the People's Rally for Overthrow of the Shidehara Cabinet, as quoted by the Yomiur, newspaper, April 8, 1946 . 16 Yorniuri, April 8, 1946 ; Asahi, April 8, 1946 ; and Shiryo (op . cit.), p . 929 . 17 Asahi, April 8, 1946 ; the Mainichi newspaper, April 8, 1946 ; Yomiuri, April 8, 1946 ; Akahata, Nos . 30 and 32 (May 1 and 11, 1946) ; and Mark Gayne, Japan Diary, 1948, the entry for April 7, 1946 . 18 M . Gayne, ibid . 19 Tokuda Kyuichi, 'Shucho : Jiiundo no Igi to sono Hoho' (Opinion : How Should a Demonstration Movement be

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35

Carried out?), Akahata, No . 27, April 12, 1946 . 20 `Food Crisis and Mass Demonstration', an Asahi editorial, May 19, 1946 . 21 Shiryo (op . cit). p . 117 . 22 Ibid ., p . 118 and Yomiuri, May 20, 1946 . 23 Statistics of the Tokyo Metropolitan Government's Food Section, as cited by Asahi, May 26, 1946 . 24 The decision delivered by the Tokyo District Criminal Court on the so-called `signboard incident', as quoted in Shiryo (op . cit .), pp . 59 and 121 . 25 `Food Crisis and Mass Demonstration', an Asahi editorial, May 19, 1946 . 26 That many city dwellers co-operated spontaneously in demanding increased food rationing and for people's control over food distribution is clearly indicated, for example, by the seizure of ration rice at the Yakuoji Ration Centre, Ushigome-ku, Tokyo, on May 12, 1946 . When 10 local community leaders, including Suzuki Masatoshi, head of the 32nd Town-block Association of Kaga-machi, Ushigome-ku, visited the nearby Yakuoji-machi Ration Centre to negotiate concerning food distribution, `a group of about 100 poor citizens in the neighbourhood' who heard about the negotiations stormed the centre with their ration ticket books in hand . The group found 5 bags of ration rice for distribution to the `residents of Demobilisation Bureau's Dormitory', demanded that the rice should immediately distributed, and managed to get a ration of 1kg of rice per family . Called a `touchstone' of the police's capability to maintain `the capital city in peace' by the Chief of the Metropolitan Police's Criminal Division, the incident drew a lot of attention . (See Asahi, May 4, 1946, for more details.) In mid-May, 1946, just prior to the May Day for Food Rally, similar incidents took place one after another in Tokyo . On May 11, two ration centres in Suginami-ku, one in Nakadoricho and the other in Shukumachi, were stormed by local residents ; on the following day, one centre in Kiowa-machi, Edogawa-ku, and one in Iriaria-machi, Omori-ku, were hit, and three days later one in Arakawa-ku became the target of a similar action . May 18 saw citizens' rallies in 9 wards of Tokyo : Oji, Hongo, Takinogawa, Ushigome, Oi, Omori, Ikebukuro, Itabashi and Suginami . For details, see reports made by newspapers in this period . 27 `Program of Actions' adopted by the Fourth Congress of the Communist Party of Japan . See the Central Committee of the CPJ, ed ., Nihon Kyosanto Koryo-shu (Collection of Programs of the Communist Party of Japan), p . 74 . 28 `Resolution adopted by the People's Rally to Secure Rice, May 19, 1946, as cited in Shiryo (op . cit.), p . 118 . 29 Decision delivered by the Yokyo District Criminal Court on the `signboard incident' . See Shiryo (op . cit .), p . 120 . 30 Mainichi, May 20, 1946 . 31 Yoshida Shigeru, as told a Foreign Minister's secretary, as cited in Yomiuri, May 20, 1946, and cited in Yomiuri, May 20, 1946, and Mainichi, May 20, 1946 . 32 M . Gayne, op . cit., entry for May 19, 1946 . 33 Mainichi, May 20,1946 ; Yomiuri, May 21, 1946 ; Asahi, May 21, 1946 ; and Akahata, No . 35, May 26, 1946 .

36

CAPITAL & CLASS 12 34 M . Gayne, op . cit., entry for May 19, 1946 . 35 Nippon Times, May 21, 1946 . 36 For the view which looked upon the US occupation forceas `forces of liberation', see Ueda Koichiro, Sengo Nihoni Kakumei Ronso-shi (History of Controversies on the , Postwar Japanese Revolution), Vol . I . 37 `Statement of the CPJ', as cited in Asahi, May 21, 1946 . 38 It is nowadays conventional to denounce the view of the US' forces as a force of liberation as a mistake, and in fact the CPJ has criticised itself to this effect . However, I think this concept of the occupation forces was completely consistent with the strategic goal-i .e . a `democratic revolution' advocated by the CPJ at the time ; it was the occupations forces themselves that undertook the dismantling of the Emperor system as a system of rule, and carried out land reforms and the dissolution of the Zaibatsu groups . Then, why is it that the labour movement, in spite of these accomplishments of the occupation forces, were in fact sharply opposed I to the occupation forces? Why is it that the official CPJ platform denounces the above definition as a total mistake? In i my opinion, this view, by denouncing this definition of the occupation forces, is in fact maintaining that the strategic goal of a `democratic revolution' which is quite consistent with the definition, was itself in error . It is my contention that the problem addressed by this logically inconsistent view can be solved only by postulating a hypothesis that a i `socialist revolution', rather than a `democratic revolution', was the strategic goal which the Japanese working class was in fact striving toward at the time . 39 For the sake of references, it is worthwhile to note how the Japanese electorate voted in the April 10, 1946 general election . The two bourgeois parties, the Progressive and the Liberal Parties, came out the victors jointly gathering 43 .1% of the votes and obtaining 50 .5% of the seats, while the two workers' parties, the Socialist and the Communist Parties, jointly gathered only 21 .6% of the votes and obtained only 20 .9% of the seats . To compare the gains of the Socialist and the Communist Parties, the former gained 92 seats compared to the latter's 5 . The Liberal and the Progressive Parties won the election on the platform of `preservation of the Emperor system', while the Socialist Party advocated the establishment of a constitutional monarchy through 'readjustment and reduction of the Emperor's power and prerogatives' . It is thus quite evident that the Japanese, even after the defeat in the war, were still unable to rid themselves of the traditional ideology of the Emperor system .

This article on the new cold war continues our new section of C & C, which is intended to provide background information and analysis on current affairs . Our aim is that these articles should be short (no more than 3,500 words) as snappy as C & C contributors can make them, and free from the constraints of detailed research and lengthy footnotes that characterise our usual offerings. They can address any matter of topical concern, whether it be of the headline variety or those issues normally expunged from the newspapers . We are hoping in this way to build a further link between our regular in-depth theoretical and empirical articles, and immediate political and economic issues . These contributions will not go through the normal C & C refereeing procedures, but for the sake of speed and currency wil be considered by the EC alone (at the last minute before publication, if necessary) . It would be useful if short bibliographical guides could be appended to the text. We would very much welcome contributions and comments on this new venture .

THE NEW COLD WAR[ 1 ] Dan Smith and Ron Smith As the Olympic flame was being put into cold storage for another four years[2] the cold war was coming back to the boil . Mid 1980 saw a level of international tension, aggressive rhetoric and military effort which signalled a return to old style confrontation . The immediate cause of this collapse in detente is usually presented as the Soviet invasion of Afghanistan . While the use of Soviet combat troops outside Warsaw Pact territory for the first time since the end of World War II does represent an important break in policy, the new cold war predates the invasion and cannot be explained as a response to this development . For example, the current increase in western military budgets was first agreed by NATO in 1977 ; SALT II, though signed in June 1979, was immediately obstructed in the US Senate and the ratification process was postponed before Afghanistan ; NATO's decision to introduce 582 new theatre nuclear missiles into West Europe was taken in preliminary form in June 1979 and con-

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firmed in December 1979[3] . The new US nuclear targetting policy (aiming at Soviet missiles rather than cities) although sanctified by Presidential Directive 59 in August 1980, has been in the process of implementation since Schlesinger changed the direction of policy in 1974 . Among Western strategists the shift in outlook began almost five years ago . Since then the old policy of treating the objective of strategy as being mutual coexistence and the prevention of nuclear war, which was associated with the Mutual Assured Destruction (MAD) doctrine, has been steadily replaced by concern with fighting, surviving and winning a nuclear war. Afghanistan is a real issue . It represents a pattern of Soviet policy rather different from either the interventions in Hungary in 1956 and Czechoslovakia in 1968, or the support and provision of aid to armed struggles in the Third World by indigenous liberation movements and/or Cuban forces . But whatever the significance of the invasion as an indicator of Soviet intentions, Afghanistan provided the West with a useful peg on which to hang justifications for a change in direction that had already been planned and was well underway . This change in direction originated in the western response to a failure of the international regulation of the capitalist system in the 1970s . Some have interpreted the higher military expenditure in underconsumptionist terms, and portrayed it as a simple response to world recession . In fact the military expenditure will not resolve the crisis but deepen it . The origins of the fresh outburst of militarism lie not in the recession itself, which is a necessary part of the restructuring of global capital, but in the contradictory requirements of state regulation on a world scale . International State Apparatus

The capitalist state provides those conditions necessary for accumulation that cannot be provided by individual capitalists . These include the maintenance of capitalist social relations, the provision of monetary and legal systems which allow circulation to proceed smoothly, and the provision and regulation of the supply of necessary labour power and raw materials . At the level of national capital, the nation state can act directly to meet these needs, but for international trade and finance to proceed these needs must also be met at a world level . With the growing internationalisation of capital and increased complexity of the system the need for international regulation increases . Thus in the 19th century when most production took place within nations by national capitals the organisational requirements of the system were much simpler than today . Given the absence of a world state, these functions tend to be performed by one individual nation state, which has predominant economic, political and military power . Through coercion and influence a 'hegemonic' power of this sort may be able to dominate and organise other states . Britain took this role before World War I acting as world banker and policeman, while the US took up this role during the Second World War, providing the

BEHIND THE NEWS : COLD WAR

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political requirements for the long boom . The length and severity of the slump of the 1930s was partly the consequence of the lack of a hegemonic power, Britain being incapable of taking the role, the US being unwilling . The post-war boom was dependent on the hegemonic role of the US Trade and payments were organised around the Bretton Woods system, largely in the form proposed by the US . The dollar was the main trading and reserve currency, and Marshall aid provided the initial injection of liquidity to fuel the growth process. The US secured capitalist social relations by confronting the socialist countries and weakening working class movements in the capitalist world, and it took a major role in guaranteeing a secure supply of primary products, by the use of its economic and military power in the Third World . By the late 1960s however, US dominance had declined . The low growth of output and productivity (partly a consequence of the military expenditure and foreign investment associated with its hegemonic role) made it less important as a market and supplier . The glut of dollars on the market (again a consequence of its use of hegemonic power) drove down the dollar and undermined US policy . One symptom of this loss of economic power was that US GNP, which in 1953 had been more than twice that of W . Germany, France, Italy, Japan and the UK combined, was by 1977 less than their total GNP . Corresponding to this was a loss of military dominance symbolised by defeat in Vietnam, by Soviet attainment of strategic nuclear parity, and by impotence in the face of OPEC . The initial symptoms of the loss of dominance had appeared in the foreign exchange market with the run on the dollar and the establishment of a two tier gold market in 1968 . And it is in the international trading and monetary relations that the lack of regulation is most obvious-appearing as exchange rate volatility, interest rate wars, difficulties with financing deficits, and growing protectionism . A new basis for international regulation

In an environment in which imperialist dominance over the third world and raw material supply is sharply reduced ; in which interimperialist conflicts and rivalries threaten to disrupt political and trading relations ; and in which the crisis has sharpened class conflict within the imperialist nations, the need for capitalism to reestablish some method of international regulation is pressing . There are two different routes by which such regulation might be restored . Either the US could re-establish hegemony despite the contradictions of its position, or the capitalist world could fragment into regional trading blocs (like the EEC) with regulation within them and conflict between them . The new cold war is one element in a strategy to prevent the latter happening . It is both a product of the disintegration, and a means by which a new basis for US hegemony can be created . In US eyes the problem facing the west is lack of leadership, and the response has been to counterbalance political and economic decline by increased military power .[4] To support this the



40

CAPITAL & CLASS 12 Soviet threat has been used to try and intimidate the other capitalist powers into accepting US hegemonic regulation . There is some objective basis for this strategy . Protecting the system as a whole must in the last resort take priority over inter-imperialist rivalry for capitalism. Despite relative economic decline the US remains the largest capitalist economy, with immense military capacity upon which the other capitalist states depend . It is the only capitalist state with the capacity for world wide military intervention ; it provides all of NATO's strategic nuclear forces together with the vast bulk of the theatre nuclear forces ; and under current NATO plans US conventional reinforcements would be crucial in any conflict . Working from this base the US expanded its military effort with MX mobile missile system, cruise missiles and increased arms exports, reversing the relative restraint that coincided with withdrawal from Vietnam . The build-up of Soviet forces provided the first level of justification for this process, but Afghanistan has been even more useful . Within this perspective the new cold war has the same functions as the old one-to maintain the cohesion necessary to offset inter-imperialist rivalries and to provide an ideological base from which to attack working class organisation . Just as firm domestic discipline was necessary to raise the rate of exploitation and provide the basis for rapid growth after the second world war, it is necessary once again now that the period of rapid growth is over. The new cold war also presents the same danger as the old one-nuclear holocaust .

The British response

Britain by virtue of its special relationship as junior partner in American imperialism has always played a substantial role in orchestrating cold war ideology . The last Labour government supported the planned increases in NATO military expenditure, and theatre nuclear modernisation through the installation of cruise missiles and Pershing II ballistic missiles . They also carried through the £1 billion Chevaline programme to modernise the warheads on the UK Polaris missiles, proceeded with planning for Polaris replacement, and projected large increases in the defence budget . The Thatcher government not only continued these military preparations, but provided a strident anti-Soviet rhetoric which lent support to the US response to its lost hegemony in Europe. British support for renewed hostility has a number of implications ; one is for the defence budget . Current's proposals are for military expenditure to grow at 3% per annum in real terms . To this must be added the relative price effect, the difference between the rate of inflation for military goods and services and that for the economy as a whole . In the past this has averaged around 2% a year . In the late 1970s the relative price effect was slightly lower due to the squeeze on military wages, but the present government is committed to preventing such a squeeze recurring . If output grows at 1% a year over the eighties (the government projection) these figures imply that the share of mili-

BEHIND THE NEWS: COLD WAR

41

tary expenditure in GDP will rise from a 1979 level of 4 .6% to almost 6% in 1985 and over 7% in 1990 . This will take the GDP share back up to the level at which it stood in the mid 1950s and from which it has more or less consistently declined . In a climate of economic stagnation, when other public services are being cut, it would require considerable conflict and economic disruption to enforce such a change in the balance of expenditure . In fact it is unlikely that the change is economically feasible and this is partly recognised in the cut back of £400 million in planned defence expenditure during 1980-81 announced in August 1980 . On present plans a major part of this money will be spent on the procurement of a new force to replace Polaris, Britain's independent nuclear deterrent . The government intends to purchase Trident missiles from the USA and to construct four (or possibly five) submarines in the UK to carry them . The government estimates the cost at about £5 billion in 1980 prices, though this is likely to be an underestimate . Were the procurement of Trident or any other major nuclear force likely to result in a clear strategic advantage for Britain, or even were it likely to provide an important political instrument, the decision would be understandable within the terms of orthodox strategic debate, though it would not be supportable . But the politico-strategic arguments in favour of Polaris and its successor are vague, confused and contradictory .[ 51 The most that emerges is a marginal contribution to NATO nuclear forces that are already thoroughly capable of overkill . The cost of this contribution is so large that even if annual increases of 3% in real terms are sustained, it will either require the orderly phasing out of other major military forces or result in extraordinary chaos in military policy and industry at the end of the 1980s and start of the 1990s. The other possibility is that Trident will be cancelled in the face of economic constraints, like so many previous grandiose British defence projects . . Britain is caught in a two-way pull between regional political and economic collaboration in the EEC and support for the USA -the two alternative modes of international regulation-spiced with a hankering after lost imperial glories . The lack of clarity in the official arguments for Trident reflect this confusion . Trying to have it all ways at once, the British state ends up with an incoherent, expensive and unworkable policy .

Conclusion

The new cold war comes at a time when inter-imperialist rivalries are intensifying, with the associated failure in US leadership and the collapse of capitalist cohesion . The function of cold war remains to offset those rivalries and to bind the capitalist states together. The external threat to capitalism as a system is used to legitimise efforts to prevent further erosion of the US position and to prevent domestic upheavals in Western Europe . The danger of this response-nuclear holocaust-is increased because western strategies increasingly stress the utility of nuclear weapons . This is recognised not merely in targetting doctrines but in civil defence

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CAPITAL & CLASS 12 campaigns which appear to prepare for the inevitable . The break down of US hegemony has exacerbated the economic crisis ; the consequent high military expenditures will exacerbate it further . Periods of crisis are inherently times of restructuring and change and inherently unstable . The dangers at this period are greater : because nuclear weapons, strategies and military power, are being! used by the USA and Britain to delay change, to counterbalance decline, and to assert claims to unsustainable positions . The interaction of these pretensions with inter-imperialist instability could) trigger disaster .

FOOTNOTES

1

2 3

4 5

These notes draw on material from Smith, Ron, 'Britishi Capitalism in the World Economy, CSE Conference 1980„ Smith, Dan, The Defence of the Realm in the 1980s, (Croomi Helm, 1980) and a joint paper `Britain : Going for a Broke' toi be published in Thompson, E . P . and Smith, D . (eds.), Protest and Survive (Penguin Special, 1980) . D . Coleman (BBC 1) as quoted in Private Eye . Broadly speaking, strategic nuclear weapons have intercontinental range ; theatre weapons have a range over the whole of I Europe including western USSR ; and tactical weapons are for use on the battlefield, which is usually assumed to be Germany . Rothschild, E ., `The American Arms Boom', Thompson and I Smith, op . cit ., and Business Week, 12 March 1979 . Details on the Trident question and the British defence budget are given in Thompson and Smith, op . cit .

HISTORY WORKSHOP a journal of socialist historians Issue 9(May 1980) includes : Clues & Scientific Method by Carlo Ginzburg Plebeian Spiritualists 1853-1913 by Logte Barron Great Exhibitions before 1851 by Toshio Ausamirsu Morris Motors in the 1940s by Arthur Esell Walter. a soldier in Spain by Len Crome Tokens in the Industrial Revolution hr Jim Newmark T. E . Bowkett by Stan Newens Debate : The Methods of History Workshop Section on History and Film In forthcoming issues : Robinson Crusoe b_v Christopher Hill The Revolutionary Tradition in Islam by Thomas Hodgkin Images of Socialism under Patriarchy by Hannah Mitchell History & the Politics of Language in France by Pierre Achard Work & its Representations by Maurice Godelier Folk Song Collecting in Sussex by Vie Gammon May Cecil Sharp be Praised? by Dare Harker Women, the State & Pro-natalism in the 1940s & 50s by Denise Riley Broken Families in 16th C. England by Miranda Chavior Coventry Shop Stewards in World War 2 by James Hinton Shop-floor Bargaining in 20th C . Britain by Jonathan Zeitlin Annual subscription (2 issues) L5 UK, L6/US$14 Overseas Back issues (nos. 3 - 8 available) L3 .45 + postage (40p) from History Workshop, PO Box 69, Oxford

Labour Use and Labour Control in the Brazilian Automobile Industry John Humphrey In the past quarter of a century the major Latin American economies have been transformed by the implantation of new industries producing consumer durables and capital goods . In Argentina, Mexico and, above all, Brazil, the so-called `modern' sectors have come to occupy an increasingly dominant position within industry as a whole . These sectors are characterised by the importance of foreign capital, and their development is widely recognised in Latin America as creating a qualitatively new phase of imperialist expansion and penetration . However, it has been argued that industrial expansion in Latin America is extremely uneven, and that even within the most advanced capitalist economies in the region there is a marked difference between the level of development of the productive forces in the new, `modern' sectors and the level in the more `traditional' sectors . The failure of the new productive conditions to generalise throughout the economy has, therefore, produced what has been termed as a structural heterogeneity of industry . This much is not in doubt, although the precise terms used to describe and explain the differentiation of industry may be subject to discussion . However, there is doubt about the effects of this heterogeneity of industry on the working class . The most obvious feature of the new sectors is the relatively high wages paid to the workers employed in them, and the existence of high wages, combined with certain assumptions about the reason for them and the types of labour process that occur in modern industry, have led some writers to argue that there is a fundamental division within the working class between the workers in the high wage sectors and the mass of workers in low-wage, lowproductivity employment. The modern sector workers, it is argued, form a separate stratum within the class as a result of

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CAPITAL & CLASS 12 their special skills and aptitudes and the employment practices on the firms they work in . In this paper I shall examine and criticise theories of dual and segmented labour markets by means of a discussion of they situation and activities of workers in the Brazilian motor industry. The Brazilian auto assembly industry is the largest ins the underdeveloped world, producing over one million vehicles, in 1978, and it is entirely controlled by foreign capital . I shall) argue that the specific characteristics of employment in the industry can only be explained by means of an analysis that defines production as not merely a technical process, but as a labour process involving the domination of labour by capital) within specific conditions of valorisation and class 'struggle . I shall show how the use and control of labour in the Brazilian auto industry in the seventies was not determined merely by the structural characteristics of auto production, but rather was developed in response to the specific economic, social and political conditions existing at that time . By stressing the importance of the control and domination of capital over labour (and ' the points of weakness of this control and domination), it becomes possible to both understand the dynamics of struggle at the point of production and relate the immediate conflict between capital and labour at this point to the wider social and political context .

Structural heterogeneity and labour market segmentation

The concept of structural heterogeneity of industry was developed within the structuralist school of analysis, and an exposition of its basic argument can be found in the work of Anibal Pinto (see, for example, Pinto, 1965) . He argues that in the consumer durables and capital goods industries the production conditions are equal to those in the developed countries, but that such conditions are not created in the traditional sectors of the economy (1965 : 7-8) . In the major Latin American economies it is certainly true that the arrival of multinational corporations in areas such as the motor industry, domestic appliances, heavy electrical machinery and telecommunications has led to the introduction of advanced methods of production and the growth of large factories . At the same time, the arrival of these new productive establishments has appeared to alter the situation of the working class. As well as being employed by large, foreign firms, the workers in the modern sector receive higher-than-average wages. For example, the average wage in large auto assembly and components firms in Sao Paulo was 40% above the industrial average in 1974, and this figure was almost double the average wage rate in the textile industry (IBGE, 1977) . At the same time, the employers in the modern sector have appeared to adopt policies to co-opt their workforces, through the provision of medical services, transport, canteens etc . The basis of the differentiation of the working class is not I only high wages, but also better working conditions and employment opportunities, according to such writers as Foxley and

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Muniz (1977) . It is argued that the concentration of technical progress in the modern sector creates a demand for a specific type of labour. Workers in the modern sector, it is stated, are generally skilled, and even if unskilled workers are recruited they are given a training within the firm and acquire specialised skills and knowledges that make them valuable to their employers (1977 : 86) . The possession of these skills requires their employers to stabilise the workers to keep the costs of recruiting and training new workers as low as possible . Therefore, the workers in the modern sector are insulated from the pressure of the reserve army of labour by their special skills and they can further enhance their privileges by using their labour market position to force their employers to give them an even greater share of the monopoly profits . As a result of this differentiation of industry and the types of worker required by the `traditional' and `modern' sectors, the working class is divided into two distinct groups . On the one hand there are the workers in the high-technology, high-wage, highproductivity sectors who enjoy stable employment and good working conditions and job prospects . On the other hand, the mass of workers remain in low-wage, unstable jobs, and they possess no skills and no chances of advancement (Foxley and Munoz, 1977 : 84-85) . This differentiation of the working class has obvious political implications . The privileged position of modern sector workers means that they have little common interest with the mass of the working class, and their special employment situation will lead them to favour direct negotiations with their employers and the development of plant unionism . This tendency is, of course, noticeable among modern sector workers in Argentina, Mexico and Brazil (see, for example, Contreras and Silva, 1972 ; Almeida, 1978) . The argument can become concerned with the question of the labour aristocracy, as happens with Gramsci when he discusses the role of high wages in the North American auto industry . He argues that the new techniques of production developed at Ford required a new type of worker, possessing both skill and discipline . Once such workers were secured and stabilised by high wages, they would become a labour aristocracy : "It would be uneconomic to allow the elements of an organic whole so laboriously built up to be dispersed, because it would be almost impossible to bring them together again, while on the other hand reconstructing it with new elements, chosen haphazardly, would involve not inconsiderable effort and expense . This is a limitation on the law of competition determined by the reserve army and by unemployment, and this limitation has always been at the origin of the formation of privileged labour aristocracies ." (Gramsci, 1971 : 312-313) The argument used here is very similar to that employed later by theorists in both the United States and Latin America for the dis-

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CAPITAL & CLASS 12 cussion of labour market segmentation and the large, modern firm . However, in spite of an initial plausibility which stems from the fact of high wages and the tendency for modern sector workers to pursue direct negotiations with their employers, the theory cannot account for the employment practices of either the Brazilian motor industry in the 1970s or the United States motor industry before the Second World War . In both cases, high wages are combined with instability of labour and the de-skilling of workers through the application of modern work organisation .

Employment requirements in the auto industry

It is on the basis of neo-classical economic theory that a number of writers associate the prevalence of high wages with either greater marginal productivity (hence the assumption that workers in high-wage industries are skilled), or monopoly power (hence theories of labour market segmentation), or a desire by firms to reduce turnover costs by stabilisation of the labour force (hence the importance of training in accounts of the modern sector) . However, in the auto industry, the beginnings of its high-wage reputation came about in very different circumstances. As Braverman points out (1974 : 147-149) Henry Ford introduced the `five dollar day' at the River Rouge Plant in Detroit because workers would not accept the discipline of the assembly line without extra payment to compensate for increased intensity of labour. Skill and training, on the other hand, were reduced by the new technology . The assembly line does not require an `organic' workforce, as Gramsci supposed . Most workers perform definite and limited jobs, and they are easily replaced . The `organic' nature of production is provided by management science and control . The assembly line decreases skill requirements, and skilled workers are only needed for servicing of the machines, construction of tools and dies, and the performance of a limited number of skilled production tasks, such as final assembly mechanics, metal-finishing and hand painting . The application of Taylorist principles to nonassembly line areas creates a similar situation there . In two large auto plants in Brazil I found that skilled workers were mainly confined to the toolrooms and the maintenance division . The majority of workers were either unskilled or semiskilled, performing routine assembly line and machine shop operations . Although the skilled workers received much higher wages than the other workers, these wage levels were roughly equal to skilled wage rates in other companies . The workers who received the biggest differential wage above what they would expect to earn in other firms were the unskilled and semi-skilled workers, particularly those on the assembly line . There is no evidence that this latter group of workers formed a privileged group . They needed no special skills and they were recruited from a wide range of firms, both industrial and nonindustrial . Therefore, as long as workers were willing to accept the physical stress and the discipline of work in the auto plants, they were acceptable . No apparent segmentation of the job pool prevented certain workers from being considered for employment

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in the industry . Once employed, the new auto worker did not receive a lot of training . There was no formal training in either of the two plants studied, and in a further survey of three other plants in Greater Sao Paulo, only one small firm claimed to run a training programme designed to teach the workers practical skills . In the other cases, the only training programmes were those run by the National Apprenticeship Scheme, SENAI, which were solely designed for young people entering the plants from school Informal training-the acquisition of skills and knowledges 'onthe-job'-does of course exist, but its significance should not be overestimated . On the assembly lines training times can be as little as a few days, and even in the machine shops the training period can be as little as two weeks (for a discussion of this in the case of the British motor industry, see Turner et al, 1967 : 89) . Even more important, studies of the effect of new technology on skill requirements indicate that operator skill will be reduced by the introduction of the latest technology into the Brazilian auto plants, as has been occurring in the latter part of the nineteen seventies . As a result of this type of labour demand, there is no need for auto employers to stabilise their work-forces or create groups of trained workers through a process of internal training and promotion . In the Brazilian auto industry there is promotion from unskilled jobs to semi-skilled jobs, but this is more a device to control wage costs (as will be discussed below) than a real promotion corresponding to skill acquisition. Management do prefer workers to have some general experience of industry when they are hired, but this can be so general that there is only a limited preference for hiring workers with previous auto industry experience . In Sao Paulo, the largest industrial centre in South America, there is no lack of workers with industrial experience . On the basis of this information alone it is possible to cast doubt on the notion that workers in the modern sector form a stable, privileged elite of skilled and specialised workers (as claimed, for example, by Miller, 1971 : 241) or that the requirements for auto employment are specialised enough to deny workers from other sectors access to auto jobs (as argued by Cimillo et al., 1973 : 145-146) . However, if this is the case, how are high wages to be explained? High wages and Most of the discussion of the existence and the role of high wages labour control is derived from attempts to discuss wage structures in the United States . The concepts of primary and secondary labour markets (as used by Foxley and Munoz), and notions of internal labour markets and the reasons for job stability, all derive from attempts to explain the characteristics of job markets in the manufacturing industries of the United States in the nineteen fifties and sixties . However, the relevant period for comparison is, in fact, the period before the Second World War, because it is at that time that the combination of high wages and labour instability is found . As McPherson argues:

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CAPITAL & CLASS 12 `During a period of some thirty years [prior to the unionisation drive in the thirties] the [auto] industry had been conspicuous for its high hourly wage rates, sharp variability of employment, speed and efficiency of operations, in security of job tenure, and resistance to unionisation .' (McPherson, 1940 : 3) This could be a description of the Brazilian auto industry . Hourly wage rates are high, operations are speedy and efficient, the union is unwelcome, and there is little job security . In addition, McPherson states that most labour was unskilled, with less than 10% of jobs in the industry requiring more than one year's training (1940 : 8) . The combination of high wages and instability of labour stems from a particular pattern of labour control and the need to keep down costs . Henry Ford described the basics of the system : 'One frequently hears that wages have to be cut because of competition, but competition is never really met by lowering wages . Cutting wages does not reduce costs-it increases them . The only way to get a low-cost product is to pay a high price for a high grade of human service and to see to it through management that you get that service .' (Henry Ford,

1926 : 43) Ford, in this passage, was discussing the policy for unskilled workers, and the high grade of human service he referred to was the aptitude for accepting discipline and hard work . As Braverman points out, the introduction of the five-dollar day at the River Rouge plant in Detroit was designed to attract workers to the plant in spite of the intensity of the labour to be performed there . The same policy operates in the Brazilian motor industry . High wages are paid (relative to other firms, although not in relation to workers' needs), but costs are controlled by a policy of rotation of labour, which also plays a role in the imposition of discipline upon the workers . Rotation of labour involves both occasional sharp reductions in the labour force of one or more of the principal firms, and also a tendency for a constant renewal of the labour force, with workers entering and leaving the major auto plants at the same time . One basic motivation for this policy is the control of wage costs. According to a leading executive in one of the multinational corporations that operate in Brazil's auto industry, the finance departments in each firm impose two kinds of limits on wage costs in the productive units under their control . Firstly, wages cannot rise above a certain percentage of total costs . Therefore, if output falls, the wage bill must be reduced as well . Employment tends to follow the trend in output, which in turn is very much determined by sales figures . Auto sales are, of course, extremely volatile, being affected by both seasonal and cyclical fluctuations . It is not uncommon

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for hundreds of workers to be taken on or dismissed at any one time, and sharp rises in employment can be followed quite quickly by sharp falls . For example, in one firm, the number of assemblers rose by 60% within a few months in the early part of 1974 . But when sales turned down sharply at the end of the year (contrary to the firm's prediction of a rise), the number of unskilled workers in the assembly area fell by 40% in just one month, and the number of semi-skilled assemblers fell by 25% . Secondly, the wage bill overall is kept down by a policy of dismissing high-wage workers and replacing them with new, lowwage employees. Most of the companies have a wages structure that gives workers small rises according to how long they have been employed, and this means that workers who stay in the plants for a long time will be earning more than workers who have only just entered . It follows, then, that with a stable labour force the average wage rate paid would rise over time . Rotation of labour stops this happening, while preserving the advantages of multiple rates for the same job, which are fragmentation of the labour force and the fixing of the starting rate at a lower level than is needed to keep longer-term workers tied to the firm . The result of these two practices has been high rates of turnover . In 1977 and 1978, which were two years of constant or rising output, the annual rate of turnover (number of people leaving their jobs as a percentage of the total workforce) in the six major auto companies in Sao Paulo varied from 13 .4% to 31 .9% . Given that the total labour force includes white-collar and skilled workers, who are more stable in their jobs, the turnover rates for semi-skilled workers are probably much higher than these figures . Precise figures on the causes of turnover and the types of worker dismissed are not available, but in two firms in 1978, 62% and 75% of all workers who left had been dismissed by the firm for no reason other than a management decision (i .e . they were not disciplined or left of their own accord), and they had worked for more than a year before their dismissal . Therefore, turnover is not the result of workers leaving out of a desire to change jobs, or the rapid turnover of workers entering the plant and then leaving again very quickly . As in the case of the USA before the Second World War, the motor industry is notoriously a hire-and-fire sector . Rotation also helps the imposition of discipline . Although rotation is partly designed to reduce overall wage costs, the auto firms are willing to pay relatively high wages . By paying such wages the firms gain a ready supply of labour, and they can choose the most suitable candidates from the large number of workers who apply for jobs . At the same time, the firm can keep the workers it wants to, but also find replacements for workers that it wishes to dismiss . The effect, therefore, of high wages is not necessarily to reduce turnover, but to make turnover part of company policy and under company control . Management decide who will leave and who will stay . The workers, on the other hand, 012D

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CAPITAL & CLASS 12 are anxious to keep their jobs . Because of the high rates of pay, losing a job in the auto industry can mean real financial hardshil for workers . One survey of workers dismissed from Ford in 197 showed that of 500 workers who lost their jobs, 50% had worke, in the factory for more than 4 years . Of those 500, only half ha, been able to find a new job, and of these most had suffered a fal' in wages (Tribuna Metalurgica, July 1977) . The threat of disi missal is very real in the auto industry, and management use it a , part of their strategy of labour control . The fact that a significant proportion of the labour force will be dismissed anyway becaus-, of the rotation policy adds even greater weight to the threat that management can impose . Workers know that when the time fo dismissals comes round, the foreman will sack the workers the ; do not like and those who are less co-operative . This threat aids the imposition of discipline in production . 11 the modern auto plant, jobs are specified by the time stud; department, and the operations required to construct an auto mobile or truck are fully known to management . For the smoot, running of the plant, discipline is required, both in terms of the fulfilment of job specifications and the adaptability to perform according to modified instructions if there is some problem wit! production, as inevitably arises in complex metal fabrication an[ assembly processes . At the same time, high wages allow the em ployers to impose an intense rhythm of work, as the followin' description of work by a foreman on the assembly line illustrates . : `They [the workers] are working more now . One doing the job of another. I had to let another two go yesterday [i .e dismiss them] but the work's the same . It's management tha : gives the orders . . . Each manager wants to cut down eves more . Work study lowered the timings and the managemen did the same .' (Interview in a Sao Paulo auto plant) In this case, management had lowered the time allowances by 5% from those allowed by Work Study and then imposed a require ment of working at 102% efficiency . But as the foreman noted' workers do not leave even under these conditions : `The workers don't complain because the situation outside is bad . They don't ask for their cards and they don't ask to b : dismissed-they are scared of losing their jobs . But tha situation is certainly too much . Welders, painters, tinsmith : [the skilled assembly line workers] -if other firms arc looking for men, they leave . They can't stand the pressure .' Only the workers with some skills can really afford to risk leavin .the auto plant, even though working conditions are bad . For the rest, they have to accept the conditions . Similarly, if th :_ employers require excessive overtime or demand changes it working practices, the workers will be more inclined to accept than would workers in a low-wage plant . It is precisely this situa tion that Braverman describes when he discusses the introductior of the five-dollar day, and when Henry Ford wrote about th .

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cutting of costs through management policy this is part of what he meant . Jhanges in This system of labour control, as applied in Brazil throughout the abour control nineteen seventies, and as seen in pre-war Detroit, requires certain general conditions for its functioning . In the various passages quoted above, the limitations of this system have already been implicitly stated . Firstly, as the foremen quoted above noted, the skilled workers are not bound to the firm to the same extent as unskilled and semi-skilled workers, because there is usually a shortage of skilled labour . Secondly, as McPherson pointed out, the labour system employed in the United States ceased to function after the plants were unionised . Once the union is able to organise, the conditions imposed on the workers have to be modified . In the Brazil, the limitations of the form of labour control described above can be seen in the late seventies . Throughout the seventies, the auto firms had trouble with skilled labour . Overall there were shortages, and auto firms were unable to create a wage differential between themselves and other firms. Supply was not good, and this meant that skilled workers were not threatened by dismissal in the same way as other workers. The firms preferred to hold on to skilled labour, and even if workers lost their jobs, they could find other skilled jobs in other firms with only a small amount of difficulty . Even in the worst period of repression of the working class, the skilled workers in the auto industry were able to provide some resistance to the employers, and they have provided the backbone of the union's organisation in the plants . Instead of controlling wages and operating a rotation policy, the auto firms have consistently had to concede wage rises for skilled workers and try to hold on to them as they were tempted away to other firms . However, the skilled workers were kept in check by the power of the State . The trade unions were kept under the control of the Ministry of Labour, and rank-and-file militancy in the plants was subject to the repression of the security forces . Strike action was often countered by the use of the police and the army, and workers in the auto industry were subjected to arrest, imprisonment and torture . This meant that only sporadic and minimally organised resistance could survive . Inter-plant rank-and-file movements could all too easily be disarticulated by the security forces . In 1974-5, for example, 200 workers were arrested in Volkswagen, and the opposition groups in the trade unions often suffered the same fate . This repression also kept the unskilled and semi-skilled workers under control. Although the growth of the motor industry has concentrated workers in large factories employing many thousands of workers-five auto plants in Sao Bernardo do Campo employed over 60,000 workers in 1978-they were kept in check by the policies described above . An overall labour surplus, combined with high wages (up to 65 pence per hour for a top-rate assembler in June 1979), rotation of labour and close

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CAPITAL & CLASS 12 supervision, held back workers' resistance . A shortage of labou would change the situation dramatically-as was seen in the periods of rapid industrialisation in Soviet Russia and Naz-, Germany-but equally significant would be a relaxation of the vigilance of the State over workers and unions . From 1977 onwards, the political crisis of the regime and its commitment toi some form of controlled and limited democratisation has led toi an increase in active labour opposition to management in the autos industry in Sao Paulo . Although most of the State's powers remain, they have been either left unused or activated in a muchi more muted fashion . Fewer workers are imprisoned for theirs union activities, and the unions have been left freer to organise As a result of this limited liberalisation, labour resistance hasi strengthened, and the most important struggles for the working class have taken place in the big auto plants in Sao Paulo . In 197E there were stoppages at a number of plants, and in 1979 there was a strike of 200,000 metalworkers in the southern industrial' belt of the city . The major auto plants were brought to a stand still for two weeks by mass pickets and the determination of thei workers not to be defeated by the bosses and the State . As well as the struggle over wages, workers and the progressive unions arei struggling for the implantation of a workplace union structures consisting of elected delegates and for a fundamental revision of the labour laws that subordinate the unions and the labour movement to the State . The employers in the auto industry have been resisting these changes, and the strike in 1979 was an extremely bitter confrontation, with the companies using a variety of tactics to harass, demoralise and intimidate the workers . However, management in the auto industry are aware that the labour control) system that worked so well for them in the seventies cannot survive into the eighties if there is a process of democratisation taking place that limits the repressive activities of the State . In fact, the growth of the workers' resistance even in the current) period of limited liberalisation has started to produce a shift ins management strategy . Management are beginning to study news ways of keeping the working class under control, realising that) the uncertainties of democratisation are sufficient to make preparation for this eventuality worthwhile . In its most limited) form, this means being more attentive to workers' complaints and attempting to resolve small problems before the union can take them up . More fundamentally, the managers in the motor industry know that the labour rotation system is extremely unpopulari among workers, and this will have to be altered . Once this goes, there will be less reason to operate the system of four, five or six i wage rates for each job category, because workers will tend toi stay in their jobs long enough to rise to the top of the scale . Therefore there will be a tendency to reduce the number ofl grades and speed up the progression through them, even though its is unlikely that they will introduce the principle of a single wage

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for each job . At the same time, there will be some limited acceptance of the introduction of union delegates in the plants . This will not only be in response to union pressure . If rank-and-file workers become more secure in their jobs, they will be able to resist the company more easily, and the employers may see the union as more of an agent of control of the rank-and-file workers than as a threat to management authority . In the longer term, therefore, the employers may try to integrate the union into its control strategy, rather than exclude it as at present . Once again, the experience of the pre-war United States auto industry throws some interesting light on these isues . After years of fierce resistance to the union, the growth of the auto industry and the new labour policy introduced during the New Deal forced the auto employers to modify their attitudes . Although they did not recognise the union willingly, they gradually learnt how to deal with it, stabilising collective bargaining and realising that the union was not a threat to the functioning of the plants . The union was able to force management into dealing with it, but management found that the union could be a useful weapon for disciplining the rank-and-file . In spite of the union, productivity and profitability were maintained (McPherson, 1940 : 150-8) . After the Second World War, the North American auto industry developed the system of seniority and stability of labour which has formed the basis of some theories of dual and segmented labour markets . It is possible that in Brazil the development of trade unions in the plants and a freer political system will lead to a replication of some of the features currently found in North America . However, it should be borne in mind that differences exist in the two situations . Labour supply conditions are different, and whereas in the post-war period the US auto industry was entering a phase of sustained expansion and profitability, the auto industry in Brazil faces a rather different situation in the nineteen eighties . At the same time, political differences and possibly different priorities for the labour movement may mean that workers' demands for better wages, stability of employment and job control will find expression in mechanisms and practices markedly different from those found in the USA . When discussing employment practices and forms of control in the auto industry, such factors are as important as economic cycles (as argued by Friedman, 1977) and the general powers of resistance of the working class (see Rubery, 1978) . Accumulation of capital and labour control

It can be seen from this analysis that the theorists who derive their account of the impact of the modern sector from a theorisation of the effects of technological discontinuity and the structural heterogeneity of industry have failed to understand the nature of the labour process in modern industry . They conceive of the labour process as a technical process, with the result that the employment practices found in a particular firm are thought to be derived from the technical nature of production alone . In other words, employment practices are derived from assumptions

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CAPITAL & CLASS 12 about skill, training times, technological level etc . However, the labour process is also a valorisation process and part of the expansion and accumulation of capital . This has three immediate implications. Firstly, the organisation of industry is determined by the need to control labour as well as to organise it . The management systems in the auto industry and elsewhere have to have within them forms of control and monitoring, and the organisation of production itself will reflect the need of capital to remove sources of potential discretion and power for workers . The design of machinery, the division of labour and the control of information systems are all part of the system of control, as the Brighton Labour Process Group argued (1977) . But, in addition, it has been shown that wages policy is important as well, and that forms of control may vary according to labour market conditions. Secondly, the control of capital is exercised within the context of capitalist competition . The emphasis placed by the `Italian school' on the struggle between capital and labour at the point of production perceives the use-value aspect of the production process, but fails to locate it in the context of specific valorisation problems . In the case of Brazil, the auto industry may not develop the kind of labour system found in the USA after the Second World War because the competitive conditions in the eighties may force a tougher management response . Thirdly, the accumulation of capital takes place under certain specific social and political conditions, and the precise forms that labour control take depend on these conditions . If these conditions change, then forms of labour control may change as well. Therefore, it is impossible to generalise about the effects of modern industry in Latin America-or even about the effects of the implantation of the auto industry in the Continent . The specific effects will vary from time to time and place to place . In Brazil at a certain time, rotation of labour was a useful policy for the auto firms, but it is not possible to say that this policy will be found at other places and times . The Brazilian system required certain legal conditions, such as the right for employers to fire workers without suffering a financial burden, and these in turn were only possible when the State was firmly under military control after 1964 . In the eighties, a possible democratisation in Brazil might render the legal protection of workers more effective . Similarly, in the Mexican auto industry labour instability was created by the use of the `temporary status', which gave workers none of the rights enjoyed by the permanent workers . However, the struggle of auto workers has limited the use that management can make of this device in recent years . In the future, management may have to adopt a completely different strategy . Within this system of labour control, high wages perform a specific function, and their role has to be analysed within a theory of labour control . They are not a concession, nor an indication that high-wage firms are willing to relax control over wage costs and productivity . In fact, the large modern firms have the

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technology and the management control systems to impose the domination of capital . Therefore, it is wrong to assume that high wages will be associated with good working conditions, fair management practices, etc . The fact that it is generally the case that high wages are associated with protection of workers' rights in the United States should not hide the struggles of workers to obtain those rights (such as seniority and lay-off pay) . In Brazil, where the working class has not had the power to force concessions from the employers in these areas, it would be wrong to expect the same conditions of work as in the United States. Recognition of this error allows two further points to become clearer . Given that auto companies use high wages for a specific purpose-the creation of a wage differential which allows labour control of a specific kind-the important thing for these companies is not the absolute level of wages, but the relation between auto wages and wage levels generally in the relevant labour markets . Therefore, it should be no surprise that for most of the period after 1964, real wages for unskilled and semiskilled workers in the auto industry in Sao Paulo have roughly followed the trend of industrial wages generally . They have failed to rise (at best), and have fallen in certain periods . In particular, information from the trade union statistical and research department in Sao Paulo, DIEESE, indicates that in the seventies wage levels in large firms in the metal-working sector (which includes the auto industry) fell, at a time when general metalworking wages (indicated by the median wage-the wage earned by the worker at the middle of the wage hierarchy) rose . This reinforces other indicators, such as Census material, which also show a tendency for wages in the transport materials sector (auto assembly and components mainly) to lag behind wages in other industries between 1970 and 1974 (IBGE, 1974 and 1977) . It can be seen that `high' wages can also mean `falling' wages, and without understanding this it is impossible to understand the force of wage militancy in the auto industry in the late seventies . The second point that becomes clearer relates to the idea of the `modern' sector . The term is generally used to refer to the new industries implanted in the fifties and after . However, the structure of the modern sector is heterogeneous, and the wage policies adopted by the companies within it vary considerably, according to the type of labour required . While it is true that they will all tend to impose sophisticated forms of labour control and management organisation of production, the kinds of labour required will vary, along with their wage policies . For example, the wages paid by General Electric are much lower than those paid in the auto industry : in 1977 the median at GE was only 63% of the auto industry figure, even though the GE plant employs over 3,000 workers . Therefore, one cannot generalise about the large, modern firm with respect to wages policy . There are considerable differences according to labour demand and labour process . One final political conclusion emerges from this analysis . It

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CAPITAL & CLASS 12 is often assumed that the employment patterns created by the `modern sector' lead to the formation of an aristocracy of labour within the working class . Clearly, the discussion above casts doubt upon the extent of the privileges enjoyed by workers in the motor industry, and within this analysis it becomes possible to begin to explain the upsurge of workers struggles in the motor industry in 1978-1979 (see Humphrey, 1979, for a discussion of these events), and in 1980 . However, there is one further point that needs attention . Although some writers do not assume that high wages lead to a labour aristocracy, but, on the contrary, accept that workers in the modern sector may display considerable wage militancy (see, for example, Almeida, 1978, who can be contrasted with Miller, Zaidi and Lund 1976 : 7, who argue directly from high wages to the notion of a labour aristocracy), there are still problems for the working class as a whole created by modern sector workers . Almeida argues that the stress on direct bargaining and the emphasis on plant struggles found in the movement of auto workers may be detrimental to the general struggles of the working class because attention is directed away from general issues and onto the specific questions affecting auto workers . However, if it is true that the conditions for labour control are not only secured at plant level, but also reproduced within the labour market and through the activities of the State, then the struggles of auto workers cannot be confined to plant issues . Far from adopting the `apolitical, business trade unionism' that Almeida predicted, the auto workers have become involved in a militant struggle against both the employers and the State . In the course of the recent strike movements, the Metalworkers of Sao Bernardo-the union representing most auto workers-has combined the demand for trade union freedom with calls for democratisation, amnesty for political prisoners, a Constituent Assembly, etc ., because it realises that its basic demands cannot be realised without fundamental political reform . It can be argued that the tendency for workers in the auto industry to concern themselves with plant issues is partly because the size and bureaucratisation of management structures of auto plants increases the power of auto workers and makes them more able to oppose the domination of capital . In periods of repression, this opposition is most easily expressed at plant level, but this should not be taken to indicate an inability of auto workers to struggle over wider political issues (for a full discussion of this issue, see Humphrey, 1979) . Therefore, it can be argued that the workers in the auto industry are more likely to play the role of class vanguard in Brazil than that of labour aristocracy . In so far as the labour process and management domination remain unchanged, this vanguard role is likely to continue, although this question cannot be fully discussed without a specification of the general situation and tasks of the working class as a whole .



LABOUR IN THE BRAZILIAN AUTOINDUSTRY

57

VOTE

Sociology, John Humphrey teaches in the Department of University of Liverpool . This paper is a slightly revised version of a paper first presented at a conference on `Internationalisation of Capital and the Labour Process', Mexico City, March 1980 . The author wishes to thank the Social Science Research Council for sponsoring visits to Brazil in 1974 and 1979 .

BIBLIOGRAPHY

Almeida, Maria H . T . de, 1978 'Desarrollo capitalista y accion sindical', Revista Mexicana de Sociologia, LV 2 (April-June) . Braverman, Harry, 1974, Labour and Monopoly Capital, New York : Monthly Review . Brighton Labour Process Group, 1977 . `The capitalist labour process', Capital and Class, 1 (Spring) . Contreras, Enrique, and Silva, Gilberto, 1972, `Los recientes movimientos obreros mexicanos pro independencia sindical y el reformismo obrero', Revista Mexicana de Sociologia, XXXIV 3-4 (Jul-Dee) . Cimillo, Elsa, et al., 1973, Accumulacion y Centralizacion del Capital en la Industria Argentina, Buenos Aires : Tiempos Contemporaneos . Foxley, Alejandro, and Munoz, Oscar, 1977, `Political de empleo en economias heterogeneas', Re vista Paraguaya de Sociologia, XIV 38 (Jan-Apr) . Ford, Henry, 1926, Today and Tomorrow, London : Heinemann . Friedman, Andrew, 1977, `Responsible autonomy versus direct control over the labour process', Capital and Class 1, (Spring) . Gramsci, Antonio, 1971 Prison Notebooks, London : Lawrence and Wishart . Humphrey, John, 1979, `Auto workers and the working class in Brazil', Latin American Perspectives 23 (Winter) . Instituto Brasileiro de Geografia e Estatistica (IBGE), 1974 Censo Industrial, Sao Paulo, 1970, Rio de Janeiro : IBGE ; 1977 . Pesquisa Industrial, Centro-Sul, 1974, Rio de Janeiro : IBGE . McPherson, William H ., 1940, Labour Relations in the Automobile Industry, Washington DC : Brookings Institution . Miller, Richard U ., 1971, `The relevance of surplus labour theory to the urban labour markets of Latin America', International Institute for Labour Studies Bulletin, VIII . Miller, Richard U ., Zaidi, Mahmood and Lund, John, 1976, `Modern sector internal labour market structure and urban occupational mobility : the case of the automobile industry of Mexico', mimeo . Pinto, Anibal, 1965, 'Concentracion de progreso tecnico y de sus frutos en el desarrollo latinoamericano', El Trimestre Economico, XXXII 1 (Jan-Mar) . Rubery, Jill, 1978, `Structured labour markets, worker organisation and low pay', Cambridge Journal of Economics, II 1 (March) . Turner, H . A ., et al., 1967, Labour Relations in the Motor Industry, London : George Allen and Unwin .

Strategy

No 41E BRITISH POLITICS AND CO-OPERATIVES Jim Tomlinson

The emergence of several new substantial co-operative enterprises in the mid-1970s-Scottish Daily News, Kirkby and Meriden-hasp brought a response from almost every part of the British political spectrum, from the revolutionary left to the Conservative Party ., In this paper I want to analyse these responses with two objectives. First to show what assumptions each of the contending, positions bring forward in analysing co-operatives, and second toi argue that because of the problematic nature of these positions ani adequate political response by the left must avoid the traps intoi which they fall .[2] The revolutionary left has been the most consistently hostile : commentator on these co-operatives . Typical is the S .W .P ' response to the S .D .N . co-operative proposals (Socialist Workers 20 July 1974 : `The object is to save jobs . The running of a newspaper, on any other enterprise, along commercial lines requires that) commercial considerations come first . Workers' management I sounds attractive but that management would face the same problems as the Beaverbrook management . It would have to try to solve them by trimming the workforce, by pushing `flexibility' and generally undermining the conditions that union action has achieved in the industry . . . .You cannot build islands of socialism in a sea of capitalism. And workers' management of a commercial concern i operating in that sea deprives the workers of the strength of I union organisation directed against management . . .ReaU workers' management is for the socialist future .' A parallel position was taken by Duncan Hallas in an article on Meriden in Socialist Worker on 10 August 1974, which concludes : 'Co-operative self-management by workers will come . But it can only realise its potential when the working class controls

STRATEGY

59

the economy and when planning for its own needs replaces production for profit' . A parallel position has been taken by Ernest Mandel (Mandel

1975 : `There have been many examples of workers' cooperatives that went wrong ; there have even been some that "succeeded"-in capitalist terms that is! All that they have succeeded in, however, has been to transform themselves into profitable capitalist enterprises, operating in the same way as other capitalist firms' . This widespread (though not, of course, unanimous) left-wing hostility to co-operatives [3] operating within a capitalist economy is founded on one central assumption . This is the assumption that the form of enterprise management is an effect of operating in a capitalist economy, and therefore a co-operative whatever its intentions and formal internal organisation would have to operate in a similar way to survive . This assumption finds support in a wide range of left literature, with the conception that there is an essential form of capitalist management . Thus Braverman (1974) equates Taylor's `scientific management' with the essence of capitalism-the theory behind Taylorism is `the explicit verbalisation of the capitalist model of production'

(p . 86) . This particular formulation has not gone unchallenged . Friedman (1977) argues that Taylorism is only one of two strategies open to management, the other being `Responsible Autonomy' in which workers are allowed much more immediate control over the labour process than under Taylorism . However Friedman argues that the second strategy is in effect a form of illusion-appearances change but the underlying reality of alienation and exploitation remain (p .53) .[4] Friedman's position appears ambiguous . He rightly questions the notion of unitary form of capitalist management, and therefore opens a space for posing the question of how to analyse different forms of management from a socialist position . But then this space seems to be closed by postulating a unitary effect to these different forms . Again the principal problem must be stated : the revolutionary left has failed to demonstrate that because enterprises exist under capitalism they must be managed in a particular way . Their support for this position largely depends on a meaningless tautology -`management under capitalism= capitalist management' for which no proof can or need be offered . The Labour Party has throughout shown much more sympathy for the co-operative movement, Tony Benn for example playing a crucial part in the provision of funds for three co-ops mentioned above (see Coates 1976). The most sustained argument in favour of a general application of co-operative forms of organisation (though not using that terminology) from within the `mainstream' of the Labour Party is Bray and Falk (1974) .

60

CAPITAL & CLASS 12 This is particularly interesting because it demonstrates clearl ; both the strengths and weaknesses of broadly social democrat thinking in this area . Bray and Falk take seriously the possibility of reforming the internal form of organisation of the enterprise whilst retainin : capitalist relations of production-as a result they do not fall into the trap of the revolutionary left (as above) . Bray and Fall' argue that a `worker managed' economy is possible by essentially, making managers responsible to workers, and removing the rolc of shareholders and non-worker directors in the appointmen! of management . In this way the `feudal authority' of managemen& will be undermined . Bray and Falk accept that the formal relationship of appoint' ment by workers will not necessarily provide for effective contro of management by the workforce when they stress the import' ance of workers having the necessary information available or which to base decisions . But this does not go anything like fai enough . Bray and Falk invoke the Yugoslav experience (p . 15especially Vanek 1972) but ignore the evidence of continued high' degrees of managerial control of the Yugoslav enterprise (see e .g .' Poole 1978) . This position in Yugoslavia, despite the formal' relationship of managerial subordination, raises two point particularly . Firstly the whole problem of competence of the workforce . Bray and Falk point out how often the level of competence of management in existing enterprises is often extremely) low, and this is an important point. But once one accepts there is such a thing as managerial competence one has to accept that thisi competence doesn't fall from the sky, and whoever manages or controls the managers must be trained to do so . This raises thei second major problem area . Bray and Falk talk of changing thei relationship between management and workforce but these twos elements are not problematised. That is to say, the existing, division of labour in the enterprise is not linked to the questions of control by the workforce . Yet current managerial power , surely gains support from the form of division of labour in the , enterprise, not simply from the constitutional powers of management. Effective control of the enterprise by the workforce must) therefore be predicated amongst other things upon changes in the division of labour. A general characterisation of the necessary changes is probably largely impossible ; they will depend on the particular production processes/ organisational structure etc . of'i the enterprise in question . One aspect of such changes might well I be to minimise the number of specialised managerial personnelsomething which seems to have successfully occurred in the Meriden co-operative (see Sunday Times, 4 June 1978) . In summary the shortcomings of Bray and Falk relate to a i too formalistic conception of the conditions under which control can be transferred from workforce to management . Such control requires a much more thorough-going reform of the enterprise than they envisage .

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61

The Conservative Party reaction to the growth of cooperatives is well summarised by the Conservative M .P . Kenneth Clarke (House of Commons, 22 March 1977) : 'No-one on this side of the house has anything at all in principle against the idea of workers co-operatives . Properly managed they seem to me and to many of my right hon . friends to be an attractive idea . We are principally in favour of them so long as the workers who own the industry raise capital on the market and aim to produce a proper return on the capital, so long as they are subject to the same disciplines as any one else running an industry . Most important of all we are certainly in favour of workers co-operatives so long as they can be viable without continued support from public funds' . This position has been one repeated by various Tory spokesmen both in and out of the House of Commons . The conception of the significance of co-operatives is strongly subordinated to the general anti-state intervention position of current Tory ideology . The statism of British Labourism is counteracted by a laisserfaire rhetoric which dominates discussion of almost every issue . The effect of this form of discussion is that the internal form of organisation of co-operatives is very much a subordinate issue . Whilst Tories will tend to defend the prevailing enterprise practices (managerial authority/inegalitarian wage structures) this is not at the centre of the debate . In a sense the Tories provide a similar position to the revolutionary left : the market dictates certain forms of organisation of the enterprise, which a cooperative will have to follow if it is to survive-thus in the same speech by Kenneth Clarke as quoted above he urges the need for the Meriden co-operative to end its flat rate pay system in the name of `realism' . Many Conservatives see positive advantages in co-ops as long as they operate `in a market environment' . Thus Tory opposition to Meriden was largely based on (a) the illegal action of the workers in seizing hold of the Meriden factory and especially (b) the role of the state in financing the enterprise, not opposition to co-operatives as such . [ 5 ] These advantages are nothing to do with the reform of enterprise management, but arise because if workers have a stake in the enterprise they will have to face up to `entrepreneurial realities'[6] -they will benefit or suffer directly from their own deeds by the incomes they receive . Because of this Conservatives will tend to favour co-operatives where the workforce have a financial stake in the enterprise, but in any case will expect co-ops to replicate most existing managerial practices . Two important points flow from this. First that the political impact of co-operatives is open . A widespread system of co-operatives on Tory lines would have little to offer the left . Ideologically it would fit in with conservative conceptions of a `property owning democracy', and would offer no challenge to

62

CAPITAL & CLASS 12 current reactionary managerial practices . [ 7 ] Second there is a danger that the Co-operative Movement (including the new state financed Co-operative Development Agency) would unwittingly support conservative conceptions of co-ops. This latter danger arises from the legalistic notions of co-ops popular on the social democrat left : co-ops are defined in terms of their legal status, i .e . as enterprises where membership and participation in profit is linked to the provision of labour or produce or the use of facilities rather than the contribution of capital . Such cooperatives are largely registered under the Industrial and Provident Society Act. The problem with this is that the legal status of the co-operative plays a very small part in determining its practices, and yet the legal status may be used to decide whether an enterprise is a bona fide co-operative or not . Meriden, for example, is registered as a company under the Companies Act not under the I .P .S .A . and the Meriden workers do not own shares in the enterprise . This fact means that there has been considerable disquiet in certain co-operative circles about whether such as Meriden should be allowed the title co-operative .[8] In the same way the recently announced finance of co-ops by the Co-operative Bank (via the C .D .A .) is tied to the workers themselves providing funds also, seemingly based on the notion that this will show such enterprises to be bona fide co-ops .[9] The danger from this is that social democratic legalism will combine with Tory property-owning-democracy ideology to produce co-ops which have little to offer the left . Their legal status will of itself provide little defence against the reproduction of current managerial practices . Yet co-operatives under certain circumstances could be important to the left. The reasons for this are specific-that cooperatives, by removing the power of non-worker directors and shareholders to appoint management, remove one obstacle to control of the enterprise by the workforce . This removal of one obstacle of course provides no guarantee of effective democratic control-some of the other conditions, availability of information, training in competence to control, changes in the division of labour, have been mentioned above . Without these co-operatives become of little significance in terms of challenging existing managerial control and effectively democratising the enterprise . I would argue that it is around the slogan of 'democratisation' that the left's position on co-operatives should be centred . The slogan of democratisation here as elsewhere is crucial to socialist ideology because it necessarily raises the question of organisational forms,[10] and it is precisely new organisational forms that socialists propose, and therefore this is the terrain on which they want arguments to proceed . Cooperatives are then important insofar as they provide a basis for possible organisational changes . However the precise nature of these democratised forms of organisation is a difficult and largely unexamined area as far as Marxists are concerned . Of



STRATEGY

63

course there is a great deal of left-wing material on workers' control, and in modern Britain the Institute for Workers' Control has played the major role in propagandising this position . It is however not to denigrate the Institute (of which I am a member) to say that its major task has been to argue the principle of workers control, and that discussions of the forms of organisation this would involve are not something dealt with in any detail . The same is true for most discussions of workers control . This is an area where once the possibilities of change are accepted there is a great scope for theoretical work on possible forms as well as practical struggle to achieve these forms . Whilst I have argued above that different organisational forms of enterprise are possible under capitalism, this is not of course to argue that such enterprises do not face constraintsbut that these constraints are not the effect of `capitalism' or `the market' in general, but particular constraints of operating within particular markets (labour and product) with particular means of production and within particular national economies . The conception that enterprise forms are constrained by capitalist relations of production in general is really a logical argument, i .e . once one has a conception of capitalist relations as the organising principle of social totality, the working through of these relations into all arenas is merely a problem of deductive logic . Strictly such views cannot be confuted by empirical evidence . Nevertheless it is worth pointing to examples where radically different forms of organisation have survived under capitalist relations of production . Whilst the history of producer co-operatives in Britain is not a happy one (see e .g . the Chapter by D .Jones in Coates (1976) in the Mondragon region of modern Spain co-operatives have not only survived but flourished (see Anglo-German Foundation 1977) . There are very good particular reasons for this-Basque nationalism and the inclusion of financial institutions within the co-operative institutions for example . Such elements account for success in Spain compared with the failures in Britain . In Britain some of the conditions for the reform of the enterprise can (or may be) secured at the level of the individual enterprise ; that is, the existing technological/ financial/legal position of some enterprises may make reforms possible even within that framework . But a well-founded reform of most enterprises must probably involve changes which can only be secured at another level . For example the financial system in any capitalist social formation structures the criteria on which the enterprises can borrow to finance themselves, and to change these criteria would imply changes in the national financial system . Equally certain legal changes would facilitate (not guarantee) reorganisation of the enterprise, and such changes again must be national in scope because systems of law are national . (In the future company law may be standardised at the level of the E .E .C . and then of course the need would be for change at this international rather than the national level) . So the argument that organisational changes in the enterprise are

64

CAPITAL & CLASS 12 possible under capitalism is emphatically not an argument that each enterprise in this context can be self-sufficient, can be reformed without reference to the rest of the economy, system of law etc . [ 11) Secondly a realistic assessment of the possibility of widespread introduction of co-operatives under foreseeable political and economic conditions in Britain must state that co-operatives are likely to be formed either as a result of an existing enterprise going broke (as Meriden, S .D .N . or Kirkby) or by the creation of new co-ops, mainly very small because of the problems of availability of finance, including that made available by the Co-operative Bank . Together these two types of cooperative will probably not make up a very significant fraction of British enterprises in the foreseeable future . The clear implication of this is that ways of extending workers' control of nonco-operative forms of enterprise are very important . In the same way as co-operatives do not guarantee such control, the normal corporate form does not make it impossible-it just makes the conditions for its achievement even more difficult . The struggle for the extension of workers' control, by both the creation of co-operatives and the reform of orthodox corporations faces many obstacles, not the least of which is the one imposed by the left itself . The common conception of some necessary form of capitalist management does act as such an obstalce . It provides the rationale for postponing workers control until the manana of the day of revolution and condemns the left to passivity in the face of current problems around which important political struggles could be engaged in .

NOTES

1

2

3

4 5 6

7 8 9 10 11

This paper arose out of discussions in the C .S .E . Money Group, especially with Stuart Burchell, David Fishman, Athar Hussein and Grahame Thompson ; from discussions at the 1978 C .S .E . Conference ; and from discussions in the Birkbeck seminar on politics and the state . This paper had deliberately not been posed in terms of a `strategy for socialism' in the sense that this phrase is commonly given on the British left . I believe such conceptions to be seriously deficient for reasons to be discussed in a forthcoming `Money Group' paper . For Marx's position on co-operatives see `Instructions for Delegates to the Geneva Congress of the 1st International' in Fernbach (1974) . I am not concerned here with the adequacy of Friedman's discussion of managerial strategies as such . See Bruce Gardyne (1978) . This phrase is used by Jay (1976), who though formally a Labour Party member has views fully in accord with current Tory thinking . A perceptive article in the Guardian 14 July 1978 was entitled `Don't tag all the co-ops with political labels' . See for example The Times, 20 March 1976 . See article by John Elliott in Financial Times 18 July 1978 . I owe this formulation to Paul Hirst . Stuart Burchell has impressed this point upon me .

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65

BIBLIOGRAPHY Anglo German Foundation for the Study of Industrial Society (1977) : `Worker Owners : The Mondragon Achievement', London . H .Braverman (1974) : `Labour and Monopoly Capital', New York, Monthly Review . J . Bray and N . Falk (1974) : `Towards a Worker Managed Economy', Fabian Tract 430 . J . Bruce Gardyne (1978) : 'Meriden : Odyssey of a Lame Duck', Centre for Policy Studies . K . Coates (1976) : `The New Worker Co-operatives', Nottingham, Spokesman Books . D . Fernbach (1974) : `The First International and After', Harmondsworth, Penguin . A . Friedman (1977) : `Responsible Autonomy versus Direct Control over the Labour Process', Capital and Class No . 1, Spring, 1977 . P . Jay (1976) : 'A General Hypothesis of Employment, Inflation and Politics', Institute of Economic Affairs . E . Mandel (1975) : 'Self-Management-Dangers and Possibilities', International, Vol . 2, No . 4, Winter/Spring . M . Poole (1978) : 'Workers Participation in Industry', Routledge and Kegan Paul. J . Vanek (1972) : 'The Economics of Workers' Management', George Allen and Unwin .

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Strategy

No 41E BRITISH POLITICS AND CO-OPERATIVES Jim Tomlinson

The emergence of several new substantial co-operative enterprises in the mid-1970s-Scottish Daily News, Kirkby and Meriden-hasp brought a response from almost every part of the British political spectrum, from the revolutionary left to the Conservative Party ., In this paper I want to analyse these responses with two objectives. First to show what assumptions each of the contending, positions bring forward in analysing co-operatives, and second toi argue that because of the problematic nature of these positions ani adequate political response by the left must avoid the traps intoi which they fall .[2] The revolutionary left has been the most consistently hostile : commentator on these co-operatives . Typical is the S .W .P ' response to the S .D .N . co-operative proposals (Socialist Workers 20 July 1974 : `The object is to save jobs . The running of a newspaper, on any other enterprise, along commercial lines requires that) commercial considerations come first . Workers' management I sounds attractive but that management would face the same problems as the Beaverbrook management . It would have to try to solve them by trimming the workforce, by pushing `flexibility' and generally undermining the conditions that union action has achieved in the industry . . . .You cannot build islands of socialism in a sea of capitalism. And workers' management of a commercial concern i operating in that sea deprives the workers of the strength of I union organisation directed against management . . .ReaU workers' management is for the socialist future .' A parallel position was taken by Duncan Hallas in an article on Meriden in Socialist Worker on 10 August 1974, which concludes : 'Co-operative self-management by workers will come . But it can only realise its potential when the working class controls

STRATEGY

59

the economy and when planning for its own needs replaces production for profit' . A parallel position has been taken by Ernest Mandel (Mandel

1975 : `There have been many examples of workers' cooperatives that went wrong ; there have even been some that "succeeded"-in capitalist terms that is! All that they have succeeded in, however, has been to transform themselves into profitable capitalist enterprises, operating in the same way as other capitalist firms' . This widespread (though not, of course, unanimous) left-wing hostility to co-operatives [3] operating within a capitalist economy is founded on one central assumption . This is the assumption that the form of enterprise management is an effect of operating in a capitalist economy, and therefore a co-operative whatever its intentions and formal internal organisation would have to operate in a similar way to survive . This assumption finds support in a wide range of left literature, with the conception that there is an essential form of capitalist management . Thus Braverman (1974) equates Taylor's `scientific management' with the essence of capitalism-the theory behind Taylorism is `the explicit verbalisation of the capitalist model of production'

(p . 86) . This particular formulation has not gone unchallenged . Friedman (1977) argues that Taylorism is only one of two strategies open to management, the other being `Responsible Autonomy' in which workers are allowed much more immediate control over the labour process than under Taylorism . However Friedman argues that the second strategy is in effect a form of illusion-appearances change but the underlying reality of alienation and exploitation remain (p .53) .[4] Friedman's position appears ambiguous . He rightly questions the notion of unitary form of capitalist management, and therefore opens a space for posing the question of how to analyse different forms of management from a socialist position . But then this space seems to be closed by postulating a unitary effect to these different forms . Again the principal problem must be stated : the revolutionary left has failed to demonstrate that because enterprises exist under capitalism they must be managed in a particular way . Their support for this position largely depends on a meaningless tautology -`management under capitalism= capitalist management' for which no proof can or need be offered . The Labour Party has throughout shown much more sympathy for the co-operative movement, Tony Benn for example playing a crucial part in the provision of funds for three co-ops mentioned above (see Coates 1976). The most sustained argument in favour of a general application of co-operative forms of organisation (though not using that terminology) from within the `mainstream' of the Labour Party is Bray and Falk (1974) .

60

CAPITAL & CLASS 12 This is particularly interesting because it demonstrates clearl ; both the strengths and weaknesses of broadly social democrat thinking in this area . Bray and Falk take seriously the possibility of reforming the internal form of organisation of the enterprise whilst retainin : capitalist relations of production-as a result they do not fall into the trap of the revolutionary left (as above) . Bray and Fall' argue that a `worker managed' economy is possible by essentially, making managers responsible to workers, and removing the rolc of shareholders and non-worker directors in the appointmen! of management . In this way the `feudal authority' of managemen& will be undermined . Bray and Falk accept that the formal relationship of appoint' ment by workers will not necessarily provide for effective contro of management by the workforce when they stress the import' ance of workers having the necessary information available or which to base decisions . But this does not go anything like fai enough . Bray and Falk invoke the Yugoslav experience (p . 15especially Vanek 1972) but ignore the evidence of continued high' degrees of managerial control of the Yugoslav enterprise (see e .g .' Poole 1978) . This position in Yugoslavia, despite the formal' relationship of managerial subordination, raises two point particularly . Firstly the whole problem of competence of the workforce . Bray and Falk point out how often the level of competence of management in existing enterprises is often extremely) low, and this is an important point. But once one accepts there is such a thing as managerial competence one has to accept that thisi competence doesn't fall from the sky, and whoever manages or controls the managers must be trained to do so . This raises thei second major problem area . Bray and Falk talk of changing thei relationship between management and workforce but these twos elements are not problematised. That is to say, the existing, division of labour in the enterprise is not linked to the questions of control by the workforce . Yet current managerial power , surely gains support from the form of division of labour in the , enterprise, not simply from the constitutional powers of management. Effective control of the enterprise by the workforce must) therefore be predicated amongst other things upon changes in the division of labour. A general characterisation of the necessary changes is probably largely impossible ; they will depend on the particular production processes/ organisational structure etc . of'i the enterprise in question . One aspect of such changes might well I be to minimise the number of specialised managerial personnelsomething which seems to have successfully occurred in the Meriden co-operative (see Sunday Times, 4 June 1978) . In summary the shortcomings of Bray and Falk relate to a i too formalistic conception of the conditions under which control can be transferred from workforce to management . Such control requires a much more thorough-going reform of the enterprise than they envisage .

STRATEGY

61

The Conservative Party reaction to the growth of cooperatives is well summarised by the Conservative M .P . Kenneth Clarke (House of Commons, 22 March 1977) : 'No-one on this side of the house has anything at all in principle against the idea of workers co-operatives . Properly managed they seem to me and to many of my right hon . friends to be an attractive idea . We are principally in favour of them so long as the workers who own the industry raise capital on the market and aim to produce a proper return on the capital, so long as they are subject to the same disciplines as any one else running an industry . Most important of all we are certainly in favour of workers co-operatives so long as they can be viable without continued support from public funds' . This position has been one repeated by various Tory spokesmen both in and out of the House of Commons . The conception of the significance of co-operatives is strongly subordinated to the general anti-state intervention position of current Tory ideology . The statism of British Labourism is counteracted by a laisserfaire rhetoric which dominates discussion of almost every issue . The effect of this form of discussion is that the internal form of organisation of co-operatives is very much a subordinate issue . Whilst Tories will tend to defend the prevailing enterprise practices (managerial authority/inegalitarian wage structures) this is not at the centre of the debate . In a sense the Tories provide a similar position to the revolutionary left : the market dictates certain forms of organisation of the enterprise, which a cooperative will have to follow if it is to survive-thus in the same speech by Kenneth Clarke as quoted above he urges the need for the Meriden co-operative to end its flat rate pay system in the name of `realism' . Many Conservatives see positive advantages in co-ops as long as they operate `in a market environment' . Thus Tory opposition to Meriden was largely based on (a) the illegal action of the workers in seizing hold of the Meriden factory and especially (b) the role of the state in financing the enterprise, not opposition to co-operatives as such . [ 5 ] These advantages are nothing to do with the reform of enterprise management, but arise because if workers have a stake in the enterprise they will have to face up to `entrepreneurial realities'[6] -they will benefit or suffer directly from their own deeds by the incomes they receive . Because of this Conservatives will tend to favour co-operatives where the workforce have a financial stake in the enterprise, but in any case will expect co-ops to replicate most existing managerial practices . Two important points flow from this. First that the political impact of co-operatives is open . A widespread system of co-operatives on Tory lines would have little to offer the left . Ideologically it would fit in with conservative conceptions of a `property owning democracy', and would offer no challenge to

62

CAPITAL & CLASS 12 current reactionary managerial practices . [ 7 ] Second there is a danger that the Co-operative Movement (including the new state financed Co-operative Development Agency) would unwittingly support conservative conceptions of co-ops. This latter danger arises from the legalistic notions of co-ops popular on the social democrat left : co-ops are defined in terms of their legal status, i .e . as enterprises where membership and participation in profit is linked to the provision of labour or produce or the use of facilities rather than the contribution of capital . Such cooperatives are largely registered under the Industrial and Provident Society Act. The problem with this is that the legal status of the co-operative plays a very small part in determining its practices, and yet the legal status may be used to decide whether an enterprise is a bona fide co-operative or not . Meriden, for example, is registered as a company under the Companies Act not under the I .P .S .A . and the Meriden workers do not own shares in the enterprise . This fact means that there has been considerable disquiet in certain co-operative circles about whether such as Meriden should be allowed the title co-operative .[8] In the same way the recently announced finance of co-ops by the Co-operative Bank (via the C .D .A .) is tied to the workers themselves providing funds also, seemingly based on the notion that this will show such enterprises to be bona fide co-ops .[9] The danger from this is that social democratic legalism will combine with Tory property-owning-democracy ideology to produce co-ops which have little to offer the left . Their legal status will of itself provide little defence against the reproduction of current managerial practices . Yet co-operatives under certain circumstances could be important to the left. The reasons for this are specific-that cooperatives, by removing the power of non-worker directors and shareholders to appoint management, remove one obstacle to control of the enterprise by the workforce . This removal of one obstacle of course provides no guarantee of effective democratic control-some of the other conditions, availability of information, training in competence to control, changes in the division of labour, have been mentioned above . Without these co-operatives become of little significance in terms of challenging existing managerial control and effectively democratising the enterprise . I would argue that it is around the slogan of 'democratisation' that the left's position on co-operatives should be centred . The slogan of democratisation here as elsewhere is crucial to socialist ideology because it necessarily raises the question of organisational forms,[10] and it is precisely new organisational forms that socialists propose, and therefore this is the terrain on which they want arguments to proceed . Cooperatives are then important insofar as they provide a basis for possible organisational changes . However the precise nature of these democratised forms of organisation is a difficult and largely unexamined area as far as Marxists are concerned . Of



STRATEGY

63

course there is a great deal of left-wing material on workers' control, and in modern Britain the Institute for Workers' Control has played the major role in propagandising this position . It is however not to denigrate the Institute (of which I am a member) to say that its major task has been to argue the principle of workers control, and that discussions of the forms of organisation this would involve are not something dealt with in any detail . The same is true for most discussions of workers control . This is an area where once the possibilities of change are accepted there is a great scope for theoretical work on possible forms as well as practical struggle to achieve these forms . Whilst I have argued above that different organisational forms of enterprise are possible under capitalism, this is not of course to argue that such enterprises do not face constraintsbut that these constraints are not the effect of `capitalism' or `the market' in general, but particular constraints of operating within particular markets (labour and product) with particular means of production and within particular national economies . The conception that enterprise forms are constrained by capitalist relations of production in general is really a logical argument, i .e . once one has a conception of capitalist relations as the organising principle of social totality, the working through of these relations into all arenas is merely a problem of deductive logic . Strictly such views cannot be confuted by empirical evidence . Nevertheless it is worth pointing to examples where radically different forms of organisation have survived under capitalist relations of production . Whilst the history of producer co-operatives in Britain is not a happy one (see e .g . the Chapter by D .Jones in Coates (1976) in the Mondragon region of modern Spain co-operatives have not only survived but flourished (see Anglo-German Foundation 1977) . There are very good particular reasons for this-Basque nationalism and the inclusion of financial institutions within the co-operative institutions for example . Such elements account for success in Spain compared with the failures in Britain . In Britain some of the conditions for the reform of the enterprise can (or may be) secured at the level of the individual enterprise ; that is, the existing technological/ financial/legal position of some enterprises may make reforms possible even within that framework . But a well-founded reform of most enterprises must probably involve changes which can only be secured at another level . For example the financial system in any capitalist social formation structures the criteria on which the enterprises can borrow to finance themselves, and to change these criteria would imply changes in the national financial system . Equally certain legal changes would facilitate (not guarantee) reorganisation of the enterprise, and such changes again must be national in scope because systems of law are national . (In the future company law may be standardised at the level of the E .E .C . and then of course the need would be for change at this international rather than the national level) . So the argument that organisational changes in the enterprise are

64

CAPITAL & CLASS 12 possible under capitalism is emphatically not an argument that each enterprise in this context can be self-sufficient, can be reformed without reference to the rest of the economy, system of law etc . [ 11) Secondly a realistic assessment of the possibility of widespread introduction of co-operatives under foreseeable political and economic conditions in Britain must state that co-operatives are likely to be formed either as a result of an existing enterprise going broke (as Meriden, S .D .N . or Kirkby) or by the creation of new co-ops, mainly very small because of the problems of availability of finance, including that made available by the Co-operative Bank . Together these two types of cooperative will probably not make up a very significant fraction of British enterprises in the foreseeable future . The clear implication of this is that ways of extending workers' control of nonco-operative forms of enterprise are very important . In the same way as co-operatives do not guarantee such control, the normal corporate form does not make it impossible-it just makes the conditions for its achievement even more difficult . The struggle for the extension of workers' control, by both the creation of co-operatives and the reform of orthodox corporations faces many obstacles, not the least of which is the one imposed by the left itself . The common conception of some necessary form of capitalist management does act as such an obstalce . It provides the rationale for postponing workers control until the manana of the day of revolution and condemns the left to passivity in the face of current problems around which important political struggles could be engaged in .

NOTES

1

2

3

4 5 6

7 8 9 10 11

This paper arose out of discussions in the C .S .E . Money Group, especially with Stuart Burchell, David Fishman, Athar Hussein and Grahame Thompson ; from discussions at the 1978 C .S .E . Conference ; and from discussions in the Birkbeck seminar on politics and the state . This paper had deliberately not been posed in terms of a `strategy for socialism' in the sense that this phrase is commonly given on the British left . I believe such conceptions to be seriously deficient for reasons to be discussed in a forthcoming `Money Group' paper . For Marx's position on co-operatives see `Instructions for Delegates to the Geneva Congress of the 1st International' in Fernbach (1974) . I am not concerned here with the adequacy of Friedman's discussion of managerial strategies as such . See Bruce Gardyne (1978) . This phrase is used by Jay (1976), who though formally a Labour Party member has views fully in accord with current Tory thinking . A perceptive article in the Guardian 14 July 1978 was entitled `Don't tag all the co-ops with political labels' . See for example The Times, 20 March 1976 . See article by John Elliott in Financial Times 18 July 1978 . I owe this formulation to Paul Hirst . Stuart Burchell has impressed this point upon me .

STRATEGY

65

BIBLIOGRAPHY Anglo German Foundation for the Study of Industrial Society (1977) : `Worker Owners : The Mondragon Achievement', London . H .Braverman (1974) : `Labour and Monopoly Capital', New York, Monthly Review . J . Bray and N . Falk (1974) : `Towards a Worker Managed Economy', Fabian Tract 430 . J . Bruce Gardyne (1978) : 'Meriden : Odyssey of a Lame Duck', Centre for Policy Studies . K . Coates (1976) : `The New Worker Co-operatives', Nottingham, Spokesman Books . D . Fernbach (1974) : `The First International and After', Harmondsworth, Penguin . A . Friedman (1977) : `Responsible Autonomy versus Direct Control over the Labour Process', Capital and Class No . 1, Spring, 1977 . P . Jay (1976) : 'A General Hypothesis of Employment, Inflation and Politics', Institute of Economic Affairs . E . Mandel (1975) : 'Self-Management-Dangers and Possibilities', International, Vol . 2, No . 4, Winter/Spring . M . Poole (1978) : 'Workers Participation in Industry', Routledge and Kegan Paul. J . Vanek (1972) : 'The Economics of Workers' Management', George Allen and Unwin .

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World Profitability Crisi in the 1970s : Some Empirical Evidence Shaun Hargreaves Heap It might seem a little difficult to justify yet another article on the current crisis : but there is important new evidence concerning the severity and causes of this crisis . The basic new source of evidence is an OECD study on profitability in the major industrialised countries, and the results of this work are briefly summarised in the next section . [1] Thi-work suggests that there has been a pronounced worldwide fall ins the profit rate which can be attributed to the combined effect on a squeeze on the share of output going to profits and a rise in the! capital-output ratio . The third and fourth sections of this paper then consider the causes of these movements in the share ot, profits 'and the capital-output ratio : the discussion here isi weighted towards the latter because it is this feature which has! been newly documented by the OECD study . It may be useful to comment at the beginning on the nature of this discussion of causes: in essence, it is a discussion of proximate cause because it deals only with the most concrete and& empirically observable aspects of the crisis . Such an empirical) focus has obvious drawbacks and these are most clearly revealed! in the fifth section where the prospect for renewed accumulations in the 1980s is tentatively considered . Here the discussion is restricted to plotting what has happened recently with two of the proximate causes of the crisis . However, the objective of thisi paper in this respect is quite limited : it is to inform such discussions by proximately locating the relevant barriers to capitalist I accumulation which operated in the 1970s . The crisis of profitability in industrialised countries

This section presents some important new data plotting the dimensions of the profitability crisis in the major industrialised countries . The data is important in two respects . Firstly, it gives estimates of the profit rate and until now most of the empirical I discussion of the profitability crisis has had to be content with data on the profit share only .[2] Secondly, its coverage is extremely comprehensive with details on the profit rate in all the major industrialised countries from 1955 to 1976 . Before discussing what inferences about the crisis can be drawn from this data, it may be worth pausing to consider why we have suddenly been blessed with such comprehensive data on

WORLD PROFITABILITY CRISIS

67

the profit rate . The answer is, in a sense, simple enough . Data on the capital stock is what is required to transform the profit share into the profit rate, and until now statistics on the capital stock have not been collected in some countries and in those countries where they have been collected, they have not always been published .[3] It has been the arousal of the OECD's interest in the issue of profitability which has led to the collection and publication of this data . This, itself, is interesting as a symbol of official recognition of a `problem' and as a comment on the production of information under capitalism ;[4] but it is not the only reason for the previous absence of data on the profit rate because in those countries where data was collected and published there seemed good reasons for discounting their reliability . Estimates of the size of the capital stock are based on what is called a perpetual inventory method, whereby all historic investments are summed and then subtractions are made from this for the estimated depreciation of these capital goods between now and their time of purchase . The estimate of depreciation depends on two factors, the assumed life time of the capital good and the assumed time pattern of how it is used up in production . Now, some problems arise over the latter,[ 5 ] but the real perceived source of unreliability in these statistics arose from the official estimates of the life times for capital goods . In the UK and the US, where there is data published on the capital stock, the origin of the estimated life times are tax authority estimates based on sampling in the early 1950s and 1940s, respectively, with very little change to the present day ;[6] Well, even if these estimates were good at the time, there seem equally good reasons for supposing that life times have changed between then and now : after all, there has been significant technological change over the post war period and the initial observations were made in atypical circumstances (post-war and postdepression respectively) . And indeed, when it was revealed that the UK estimates assumed that 60% of all capital goods in the manufacturing sector had economic lives in excess of 34 years : the game was up! In the cautious words of an official responsible for collecting the data : `The initial reaction of most who see for the first time the life assumptions that are used is to feel that they are probably far too long now even if they were correct at some earlier date'[71 (emphasis added) . However, there has recently been a growing body of evidence which paradoxically suggests that these estimates are not very far off the mark .f 81 In other words the anecdotal story about Ryder finding pre-1914 equipment at British Leyland is not just anecdotal it is genuinely illustrative of an economy wide phenomena . This discovery probably has important implications for the way we think about technological change effecting the economy, but from our point of view the important thing is that estimates of



CAPITAL & CLASS 12

68

the capital stock can be regarded as much more reliable than wa , hitherto thought to be the case . In the words of the same official . `The general conclusion on asset lives is . . . that they arc ubstantially right and that, surprising though it is, service lives have not changed appreciably in recent years .' Tables 1 and 2 give the trend annual percentage rate of change in the profit rate over two time periods in manufacturing and in the wider industry and transport sectors . The two time periods have been chosen so that they run either from trough to trough o~ peak to peak in the cycle so as to avoid the calculated trend' change picking up any cyclical bias. In addition, each table break-, down the trend change in the profit rate into its constituent parts: the trend changes in the profit share and the trend changes in the output-capital ratio . The derivation of these constituent parts can be easily shown from an expansion of the definition ot, the profit rate . profit rate = profit = profit _ output = (profit share) .(output/capital ratio capital output capital Table 1

Trend Changes in the Profit Rate in the Manufacturing Sector (% pa)

1958-76 Profit Rate

1955-73 Profit Share

Output/ Capital

Profit Rate

-0 .42 -2 .14 -0 .50

-0 .13 -0 .86 -4 .03 -1 .99 -1 .39 -4 .37

Profit Share

Output/ Capital I

US Japan Germany Italy Sweden UK

-0 .70 -3 .86 -4 .64

Table 2

Trend Changes in the Profit Rate in the Industry and Transport Sectors (% pa)

-0 .28 -1 .72 -4 .17

na

na

-0 .93 -8 .50

na

-0 .41 -6.23

-0 .54 -2 .26

1958-76 Profit Rate US Japan Germany Italy Sweden

UK

-1 .09 -1 .64 -1 .13 na

-4 .05 -4 .08

0.091 -0 .39 -0 .881 0.55 -0 .65 -1 .58

1955-73 Profit Share

-1 .95 -2 .35 -2 .86

-0 .22 -0 .47 -3 .20 -2 .54 -0 .76 -2 .78

na

-2 .91 -2 .19

Output/ Capital

Profit Rate

Profit Share

-0.86 -0.73 -1.58

-1 .64 0.73 -3 .25 -1 .77 -2 .54 -2 .06

-1.09 -0.33 -1.04 -2 .12 -1.69 -0 .74 (OECD, 1979)

na

-1.11 -1.86

Output/ Capital

-0.65 1 .06 -1.99 0.35 -0.75 -1.31

Source for both tables : T . P . Hill, Profits and Rates of Return Notes for both tables : Extreme care should be taken when using this data source for comparisons of the relative profitability of different countries because the coverage of the data is not always the same between countries . See Hill (1979) and Trade and Industry 17 August 1979 on International comparisons .

WORLD PROFITABILITY CRISIS

69

If the most recent time period, 1958-76, is considered first, then it is clear from the tables that there has been a progressive deterioration in profitability in all the countries in both the manufacturing and the larger industry and transport sectors . Furthermore, this decline in the profit rate can be attributed to both falls in the profit share and rises in the capital-output ratio (i .e . falls in the output/capital ratio) .[9] In short, there is a crisis of profitability ; but it has been differentially experienced across countries with the US and the UK at the two extremes and the other countries in between . If the second and earlier period, 1955-73, is now compared with the later period, it is also clear from the tables that in most countries there has been an intensification of this crisis of profitability since the early 1970s because the trend rate of change in the profit rate is absolutely greater in the later period as compared with the earlier period-one exception is industry and transport in Germany and the other is manufacturing in Sweden . It can be concluded then, that capitalism was suffering from a major crisis of profitability in the 1970s : it was on the end of a deteriorating trend of profitability which had itself intensified in the early 1970s . The next two sections attempt to provide a sketch of an explanation of this crisis, its intensification, and the differential experience between countries . This explanation will focus on the behaviour of the profit rate in manufacturing both because the data is most complete for this sector and because this sector is frequently singled out as the engine of capitalist accumulation .[ 101 Furthermore the explanation will concentrate on the rising capital-output ratio as this is the feature of the crisis newly documented by this data source and because the falling profit share aspect has already been extensively discussed . Accordingly, the next section on the profit share will be confined to a series of brief comments . The falling share of output going to profit

This aspect of the profitability crisis has been widely discussed, and typically three proximate causes of this squeeze are isolated : state expenditure, terms of trade with primary producers, and worker power .[11] The rationale for isolating these as contributory factors can be most easily demonstarated with reference to a simple manipulation of the definition for the profit share .

Profit Share = (P .Q - w .L - PNL .N L)/P .Q P NL .N L = 1 - w_L P .Q P .Q where Q = quantity of output P = price of final output w = money wage rate L = labour time paid for NL = non-labour inputs PNL = unit price of non-labour inputs

70

CAPITAL & CLASS 12 It can be seen from this definition that an increase in real wages (w/P) with everything else held constant will lead to a fall in the profit share, and an increase in the real wage can be related directly to worker power or indirectly to the growth of state expenditure : the growth in state expenditure necessitates a rise in taxation which leads workers to compensate for this by seeking higher pre-tax wages . Similarly, a change in the terms of trade will alter PNL/P and with everything else held constant this can be seen to influence the profit share from the definition . Naturally, these three factors are only proximate causes of the observed changes in the profit share because their movement is in turn typically explained with reference to specific dynamic features of the capitalist mode of production . For example, the intrinsic class antagonisms under capitalism which lead to struggles over the real wage, the facilitating role played by the state in promoting accumulation under capitalism, the international conflicts arising from imperialism, etc . But this connection, while accepted, is not going to be formally elaborated here, nor will the evidence in favour of these three causal factors be redocumented . Instead, the argument and evidence will be taken as read and we proceed to a few supplementary comments on the squeeze of the profit share . There has been another proximate cause of the profits squeeze in the manufacturing sector which has not been generally recognised in the discussion : this is the persistently lower rate of increase in manufactured goods prices relative to consumer goods prices as a whole .[12] The point here is that if workers have a target rate of growth of real wages in terms of consumer goods generally, and if manufactured goods prices fall relative to consumer goods prices generally, then the target rate of growth of real wages in terms of manufactured goods is greater than it is in terms of consumer goods generally . And, of course, it is the rate of growth of wages in terms of manufactured goods which is crucial to the change in the profit share in that sector and not the rate of growth of wages in terms of consumer goods generally . To put it another way, the squeeze on the profit share in manufacturing does not just emanate from the real wage aspirations of the workers in that sector but also from the fact that manufactured goods' prices have fallen relative to consumer goods' prices . Table 3 plots the rate of growth of real wages in manufacturing in the major industrialised countries for each of the last four cycles up to 1973-4 in terms of consumer goods generally and in terms of manufactured goods . Table 3 also includes the rate of growth of productivity for each cycle for the sake of comparison with the real wage growth data . The cycles are dated peak to peak, and as there is some variation in the timing of cyclical peaks between countries two possible years for the peaks are usually given . This table suggests that in at least 3 of the 4 cycles in all countries the slower increase in the manufactured goods' prices



WORLD PROFITABILITY CRISIS

Table 3

71

Real Wage and Productivity Growth 2nd Cycle (1955/660/1)

3rd Cycle 4th Cycle (1960/1- (1965/669/70) 65/6)

5th Cycle (1969/7073/74)

UK 3 .2 Real wage growth in consumer goods Real wage growth in manufactured goods 3 .9 Productivity growth 2 .1

2 .4 3 .4 2 .8

2 .6 3 .8 3 .7

4 .6 4 .0 2 .9

Germany Real wage growth in consumer goods 6 .6 Real wage growth in manufactured goods 6 .6 Productivity growth 5 .1

6 .2 6 .9 4 .4

5 .0 4 .6 4 .9

4 .3 5 .6 4 .1

Japan Real wage growth in consumer goods 4 .2 Real wage growth in manufactured goods 8 .6 Productivity growth 9 .0

5 .3 7 .9 7 .3

8 .1 10 .9 10 .4

11 .4 8 .6 7 .6

Italy Real wage growth in consumer goods 2 .9 Real wage growth in manufactured goods 4 .1 5 .1 Productivity growth

6 .6 7 .4 4 .3

5 .5 6 .7 5 .6

7 .6 7 .4 3 .2

1 .6 3 .0 1 .7

1 .3 3 .4 3 .4

US Real wage growth in consumer goods Real wage growth in manufactured goods Productivity growth

Source :

1 .6 2 .2 3 .2

Nominal wages : National Institute Economic Review . Prices : OECD, National Accounts ; Federal Reserve Bank of St . Louis, Rates of Change in Economic Data for Ten Industrialised Countries ; IMF, International Financial Statistics . Productivity : T . F . Cripps and R . J . Tarling, growth in advanced Capitalist Economies 1950-1970 .

relative to consumer goods' prices generally, intensified the pressure on the profit share emanating from the real wage demands of workers . The importance of this particular feature of post-war capitalist development is perhaps best highlighted if the two measures of real wage growth are compared with the rate of growth of labour productivity . If the rate of growth of real wages in terms of consumer goods generally is used then it appears that real wage growth has exceeded productivity growth and thus put pressure on the profit share in only 9 out of the 19 cycles covered by this table . If, however, the correct real wage in terms of manufactured goods is used to plot the influence of real wages demands on the profit share, then in 16 of the 19 cycles real wage growth has been squeezing profits . The causes of this difference in change in prices is probably two-fold . Firstly, one of the features of the post-war period has been the operation of comparability bargaining : as institutional factors have begun to dominate pay bargaining, as opposed to strict market forces, new factors have critically influenced the

72

CAPITAL & CLASS 12 wage bargain in different sectors of the economy, and one of these factors is comparability bargaining . Typically in these circumstances, a leading sector develops, usually manufacturing because it has the highest rate of productivity growth, and this leading sector sets a `going rate' which is transmitted to other sectors via comparability bargaining . This `going rate' can have a differential influence on the prices of the output of each sector because businesses typically try to cover the difference between wage and productivity growth through raising prices and each sector of the economy does not have the same rate of growth of productivity . Thus, a `going rate' established across all sectors translates into different price changes with the lowest productivity growth sector having the lowest price change . As the manufacturing sector is usually the high productivity sector is prices tend to rise more slowly than the prices of other sectors . Secondly, the ability of the manufacturing sector to compensate for the differential between wage and productivity growth through price increases is much more constrained than other sectors because there is greater competitive pressure : the differential source of competition being the manufacturing sector's exposure to international producers . This, again, is another particular feature of the post-war period, where there has been an extraordinary increase in trade with most of the increase occurring in manufactured goods . (On this point, it is interesting to note that three of the four times when manufactured goods' prices rose faster than consumer prices generally, happened in the last cycle when the emergence of more flexible exchange rates loosened the severity of international competition .) Table 3 also provides some additional insight into the reasons for the intensification of the profit's squeeze in the last cycle . It is clear that in the UK, Japan and Italy there was an unprecedented high rate of growth of real wages in the last cycle : this is suggestive of a surge in worker militancy in these countries, perhaps in response to increased taxes . What is equally clear however, is that it would be a little difficult to make this argument for the US and Germany where the rate of growth of real wages dropped back in this time period . Instead, the intensification of the squeeze on profits in these countries is probably attributable, and additionally attributable in the UK, Japan and Italy, to the worsening terms of trade and the slowdown in the rate of growth of productivity . This slowdown in the rate of productivity growth happened in all countries except the US and it is a crucial feature of the 1970s which is returned to later.

The rising capital-output ratio

A skeletal explanation of the rising capital-output ratio, documented in section II as contributing to the profitability crisis, will be given in this section . The explanation is limited in several respects . It will touch only the highlights because in the space available it would be impossible to give a detailed account of the experience of five countries . Furthermore, as before, it

WORLD PROFITABILITY CRISIS

73

deals only with the empirically concrete and is concerned with proximate cause . This leaves open the interesting question of whether the capital/output ratio can be taken as a reasonable empirical proxy for Marx's organic composition of capital ; if it can be taken as a fair proxy then it should be apparent that the OECD study provides important evidence in favour of the operation during this period of Marx's famous `Law of the tendency of the profit rate to decline' . [13] The proposition underlying the explanation given here for movements in the capital-output ratio is that the capital-output ratio is a function of the effective labour to capital ratio, where capital refers to the price value of machines and the like, and where the amount of effective labour can change for any of three reasons-a change in the actual labour force employed, a change in the degree to which purchased labour power is translated into labour performed and embodied in goods, and a change in the effectiveness of a unit of labour performed occasioned by an advance in the technique of production . It can be seen that the effective labour to capital ratio should not be confused with the actual labour to capital ratio, and in this light, together with the earlier caveats, the proposition should be relatively uncontroversial . After all, it is simply suggesting that the amount of output produced from a unit of capital will depend positively on the amount of effective labour applied to that unit of capital . Therefore, the capital-output ratio will be expected to decrease/increase whenever the effective labour to capital ratio rises/falls, and movements in this ratio will depend on the relative changes in the amount of effective labour and the amount of capital.[14] The sources of change in the former have already been noted above and changes in the amount of capital occur as a consequence of accumulation . In practice, the sources cannot be so neatly separated because accumulation is both the method for augmenting the capital stock and for the introduction of new techniques of production which influences the effectiveness of labour. Nevertheless, table 4 illustrates how two of the important determinants of changes in the capital-output ratio, the pace of accumulation and the growth of the actual labour force, have varied over the post-war period in the manufacturing sector of the major industrialised countries . Table 4 also gives the capitaloutput ratio in manufacturing for each cycle in each industrialised country . If the pace of accumulation is judged by the investment-output ratio in manufacturing, then it is clear from this table that the pace of accumulation in the 1950s and up through the mid1960s, the first three cycles, was significantly greater in Japan, Italy and Germany than in the US; yet there was no dramatic effect on the capital-output ratio in these faster accumulating countries . The table also provides the key to how these countries were able to maintain higher rates of accumulation without the capital-output ratio rising significantly : there was a much larger growth in the manufacturing labour force in Japan, Germany and

74

CAPITAL & CLASS 12

Table 4 The Pace of Accumulation, the Growth of the Labour Force and the Capital Output Ratio 1st 2nd 3rd 4th 5th Cycle Cycle Cycle Cycle Cycle (1951/2- (1955/6- (1960/1- (1965/6 • (1969/7C 55/6) 60/1) 65/6) 69/70) 73/4) UK Investment/Output 11 .5 12 .8 13 .1 12 .9 5 .9 Growth of Employment (%pa) 1 .2 0 .7 0 .5 -0 .9 -1 .2 Output/Capital Ratio na 62 .4 58 .6 54 .9 49 .1 Germany Investment/Output 13 .5 15 .0 16 .7 15 .2 na Growth of Employment (%pa) 5 .8 2 .9 1 .8 0 .7 ' -0 .6 Output/Capital Ratio na 77 .2 70 .6 70 .5 70 .1 Japan Investment/Output 22 .1 31 .7 35 .2 27 .7 22 .5 Growth of Employment (%pa) 6 .3 5 .6 4 .2 2 .7 1 .8 Output/Capital Ratio na 70 .9 72 .0 70 .2 62 .2 Italy Investment/Output 17 .6 19 .7 18 .9 14 .1 16 .8 Growth of Employment (%pa) 1 .6 1 .5 5 .3 1 .2 1 .8 Output/Capital Ratio na 44 .5 45 .8 46.0 (49.5) V US Investment/Output 11 .6 11 .1 13.4 15 .9 Growth of Employment (%pa) 1 .0 1 .1 1 .6 -0 .2 Output/Capital Ratio na 145 .1 154 .1 134.5 Sources : Note :

T . P . Hill, op . cit ., T . F . Cripps and R . J . Tarling, op . cit ., UP National Account Statistics, OECD, Labour Force Statistics . Care should be exercised when using the above data on capita output for cross-country comparisons (see Note to table 2) . Italy than in the US . In addition, it is probably the case that these three countries were able to increase their effective supply of labour at a much faster rate in line with the faster growth of the capital stock because they were able to borrow `new' techniques from the US . The point here is that investment may be the method for introducing new techniques which independently increase the effectiveness of labour, but it does not guarantee such improvements . Whether investment introduces new techniques or not, or the degree to which it does, depends on whether there are new techniques available . Now, their availability was much greater in Japan, Italy and Germany than in the US because these countries were technologically well behind the US during this period and could always borrow `new' techniques from the US ; in contrast, the US as the technological leader could not borrow from anyone and its ability to introduce new techniques was constrained by their actual development . It is difficult to plot what influence the struggle over the

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translation of labour purchased into labour performed may have had on the capital-output ratio in these countries because there is no independent indicator of the state of this struggle . However, as the different experience of these four countries up to the mid1960s can be reasonably accounted for without invoking this struggle, it seems likely that the struggle did not exercise a significant differential influence . The same cannot be said of the UK . It would be very difficult to explain the movement of the capitaloutput ratio in the UK in the same terms as the above description of Japan, Germany, Italy and the US because while the UK had similar technological opportunities to Japan, Italy and Germany, the pace of accumulation was similar to the US as was the growth of the actual labour force, and yet the capital-output ratio showed a steady rise . In other words, the effective labour to capital ratio must have been falling in the UK and as the pace of accumulation was similar to that of the US, the source of this fall must have been the relatively slower growth of the effective labour force . However, the actual labour force in the UK grew at a similar rate to the US and the opportunities for technological improvements were certainly better in the UK, and so the relatively slower growth of the effective labour force can only be explained by the different struggle by workers in the UK which prevented a similar translation of labour purchased into labour performed in the UK as in the US . And indeed there are various complementary pieces of evidence which suggest that something different was happening along these lines in the UK during this period . [ 16 ] With the fourth cycle in Japan and slightly earlier in Germany during the third cycle, the conditions which had fuelled the faster rates of accumulation in the earlier part of the period began to evaporate ; the large pools of surplus labour in the agricultural sector which had fuelled the growth of the labour supply to manufacturing were diminishing ; and the opportunities for exceptional technological advance were dwindling as these countries caught up with the US . The latter is a direct consequence of the earlier fast accumulation and exceptional technological change producing growth rates well in excess of the US ; and the former is also a direct consequence of the earlier fast pace of accumulation and is illustrated in table 4 by the slowdown in the growth of the labour force in manufacturing in the last 2-3 cycles . As a response to this, one can also observe in the table that the pace of accumulation also slowed down . However, it is clear from the table that the slowdown in the pace of accumulation was not sufficient to offset the slower growth in the effective labour force because the capital-output ratio started to rise in the last 2-3 cycles . It would be possible to argue that the pace of accumulation was lowered sufficiently in these countries to offset the slower growth in the effective labour supply due to the exhaustion of the pools of surplus labour and the diminished availability of `new' techniques, but that it was not sufficient to offset another

76

CAPITAL & CLASS 12 factor constraining the growth in the effective supply of labour : the intensification of the struggle over the translation of labour purchased into labour performed . Again it is unfortunate that there is no independent indicator of the state of this struggle to test the argument . But, there is some indirect evidence which suggests that the argument does not hold in the 4th cycle at least . If an intensification of the class struggle along this dimension had occurred and caused the rise in the capital-output ratio, then a slowdown in the rate of growth of labour productivity should also be apparent. However, table 3 indicates that there was an acceleration in labour productivity growth in these countries in the 4th cycle and not a slowdown . (And indeed more discriminating empirical analysis tends to confirm the hypothesis of accelerating productivity growth in the late 1960s, see Cornwall (1977) .) Similarly if the growth of real wages is used as an indicator of the state of the class struggle more generally, then table 3 indicates there was a slowdown in the late '60s in Germany . The 5th cycle is more amenable to an intensification of the class struggle interpretation because there is a slowdown in productivity growth and real wage growth in Japan continues to accelerate . However, it should be remembered that the slowdown in productivity growth could equally well be explained by the slowdown in technological advance in these countries occasioned by the `catch-up' with the US . To summarise the discussion on Japan and Germany : it would seem that the rising capital-output ratio from the early to mid-1960s onwards can be basically attributed to the failure to sufficiently lower the pace of accumulation in line with the changed conditions of accumulation, the exhaustion of the pools of surplus labour and the dwindling possibilities for borrowing technological change . In addition, it is possible that an intensification of the class struggle over the translation of labour purchased into labour performed was responsible for the rise during the last cycle in Japan. The case of Italy, the other fast accumulating country in the earlier part of the post-war period, is slightly different during the last couple of cycles. It still had large reserves of labour in the agricultural sector and there were still significant possibilities for borrowing technological advance, and so it was less constrained in the growth of its effective supply of labour to manufacturing than either Germany or Japan . This difference is captured in table 4 by the growth of employment in manufacturing which was maintained during the last two cycles in Italy at the same rate as the first two cycles . However, like Japan and Germany, there was a slowdown in the pace of accumulation .[171 Now, whereas the slowdown in accumulation tended to offset the rise in the capitaloutput ratio due to the constraint in the growth of the effective supply of labour in Japan and Germany, the slowdown produced a fall in the capital-output ratio in Italy because there was no similar constraint in the growth of the effective supply of labour . The fall in the capital-output ratio tends to slow the rate of

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growth of labour productivity, and this can be seen in table 3 to be the case during the 5th cycle . However, there is an acceleration in the growth of labour productivity in the 4th cycle which would seem to be rather surprising in terms of the account above . This paradox could be explained by capital successfully extracting more performed labour from labour purchased during the 4th cycle because labour productivity is calculated in terms of actual labour purchased . In turn, this suggestion provides an interesting backdrop to the `Hot Summer' in Italy in 1969 : the clear intensification of class struggle would then be regarded as a defensive action, and to the extent that it arrested and reversed the attack by capital, it would contribute to our understanding of the slowdown in productivity growth in the 5th cycle . The tempo of accumulation in the US during the last 2 cycles also changed . Having maintained a rather moderate pace of accumulation together with a moderate growth in the labour force during the earlier part of the postwar period, the last cycle evinces a sudden rise in the pace of accumulation and a con traction in the labour force . The dual effect of these changes being a fall in the effective labour to capital ratio, which in turn forces up the capital-output ratio . However, there is not a very signficant increase in productivity growth during this period, and this suggests the rise in the capital-output ratio cannot be fully accounted for in this way . An intensification of the class struggle over the translation of labour purchased into labour performed is not very plausible either, because there is no complementary evidence in the rate of growth of real wages ; there is in fact a slowdown. Instead the final component in the explanation of the rising capital-output ratio in the US during the 5th cycle seems to be the rise in the relative price of non-labour industrial inputs . This change in relative prices has already been mentioned in conjunction with the squeeze on the profit share and the point here is that it also has an adverse influence on the capital-output ratio . The output of the manufacturing sector is measured on a value-added basis and so if the price of non-labour inputs rises faster than the price of the final output then the recorded valueadded of that sector falls in real terms, in turn raising the capitaloutput ratio . This influence is common to all industrialised countries during the 5th cycle and should have been considered in the earlier discussion of Japan, Germany and Italy . The reason for singling it out here is that the change in relative prices was particularly extreme in the US, basically because of the depreciating dollar . Table 5 illustrates this point by plotting the ratio of the percentage change in raw material prices to the percentage change in manufactured goods prices over the last 4 cycles up to 1973/4 . There remains the UK over the last two cycles . The change in the relative price of raw materials, shown in table 5 will have contributed to the continuing rise in the capital-output ratio during the last two cycles . But, it is clearly not the only relevant factor because there were important changes in the pace of accumulation and the growth of the labour force . In the 4th cycle



78 Table 5

UK Germany Japan Italy US

Sources : Statistics ; Notes:

CAPITAL & CLASS 12 Raw Material Relative Price Changes 2nd Cycle 3rd Cycle 4th Cycle (1955/6(1960/1(1965/660/61) 56/6) 69/70) 0 0 .5 1 .3 0 0 .7 -0 .1 na 0.7 1 .5 -1 .3 0 .2 0 .7 na 0.6 0.4

5th Cycle (1969/7073/74) 1 .6 1 .2 1 .4 1 .6 4 .4

OECD Main Economic Indicators ; IMF, International Financial Statistics ; UN, Statistical Yearbook . ; UK and Italy use industrial goods' prices rather than manufactured goods for the 2nd, 3rd and 4th c ycles . U K and Germany use an index of Basic Materials rather than raw materials, and Italy uses an Industrial Materials index until the 5th cycle where a producers' goods index is used .

there was actually a contradiction in the labour force and as the pace of accumulation was maintained at its previous level, this should have led to a fall in the effective labour to capital ratio, in turn raising the capital-output ratio . There is complementary evidence for this in the growth of productivity data in table 3, where there is an acceleration in the rate as would be expected by a fall in the effective labour to capital ratio . However, there was a dramatic reduction in the pace of accumulation in the 5th cycle and while there was also a further reduction in the labour force, it seems likely that the combined effect should have been to retard or reverse the trends in the effective labour to capital and the capital-output ratios . Instead, there was a further significant rise in the capital-output ratio, suggesting again that this can only be adequately accounted for by another intensification of the struggle over the translation of labour purchased into labour performed . And, again, there is complementary evidence for this interpretation in the real wage data, where there was a significant acceleration in the rate of growth during the 5th cycle . To summarise the discussion of this section, it would appear that the only common origin of the observed rise in the capitaloutput ratio in the last part of the postwar period was the rise in the relative price of raw materials . This factor alone was probably the major contributor to the change in the US .[18] There were other important factors in the remaining countries . In Japan and Germany the rise also resulted from a rather too slow an adjustment of the pace of accumulation to the dwindling influence of two historically specific features : the surpluses of labour in the agricultural sector and the ability to borrow `new' technologies, which had permitted exceptionally high rates of accumulation, but before the influence of the same two historically specific features had dwindled, and so there was actually a fall in the capital-output ratio . It seems likely that struggles over the translation of labour purchased into labour performed also help ex-

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plain the movement of the capital-output ratio in Italy and possibly Japan . The same factor seems to have been crucially responsible for the early rise in the capital-output ratio in the UK and its continued rise in the latter part of the period .

Some important developments since 1973

Table 6

So far, this paper has documented the profitability crisis of the 1970s and discussed the immediate causes of this crisis up to 1973 . The paper should contribute to discussions over the prospects for renewed accumulation in the 1980s through its delineation of the major proximate barriers to accumulation in the 1970s. A full consideration of the prospects for renewed accumulation would require the articulation of more abstract Marxist analysis, particularly with respect to the role of the State in crisis management . It would also require a different species of concrete analysis to that attempted here ; one which would have to come to terms with the lack of summary statistics and the broader historical analyses of the class struggle which are available for earlier periods. There is not the space for this kind of development here ; and instead the analysis will continue at an empirical level by plotting what has happened since 1973 to two of the causes of the crisis isolated in the earlier sections of the paper . One common barrier to renewed capitalist accumulation in the major industrialised countries which emerges from the previous discussion is the adverse trend in the relative price of raw materials to manufactured goods . Table 6 indicates what has happened to this relative price from 1973/4 to 1978, and it would seem to suggest that the prolonged slow growth from 1973/4 onwards has successfully reversed the adverse trend . Ratio of % change in raw material prices to manufactured goods' prices 1973/4-1978 UK 0 .8

Sources and Notes :

Germany 1 .0

Japan 1 .5

Italy 0 .5

US 0 .6

see table 5 ; Italy runs to 1977 . The ratios in table 6 exhibit a distinct improvement over the same ratios for the last cycle ending in 1973/4 . But it is not an unmitigated `success' because the ratios are nothing like the heydays of the '50s and early '60s . And it must be remembered there has never been a five-year period of such slow growth in the postwar period in these industrialised countries and had there been anything like the growth rates of the 'S0s and '60s the ratios would have been much worse .[ 19] Furthermore, it must be remembered that the period covered by this table misses the most recent oil price hikes . Again on this particular aspect of the raw materials dimension of the crisis, it is clear that while the crisis has helped engineer a reduction in energy dependence (see table 7) it has not prevented accumulation in the West being threatened by OPEC, as can be seen by the aftermath of the 1979 price rises .

80 Table 7

CAPITAL & CLASS 12 GNP Elasticity of Energy Requirements (per cent change in energy consumed/percent change in GNP)

1960-73 1975-78

UK 0 .71 0 .55

Germany 1 .06 0 .96

Source :

OECD, Economic Outlook, July 1979 .

Japan 1 .00 0 .43

Italy 1 .81 1 .15

US 1 .07 0 .69

So, while the slow growth of the industrialised countries since 1973/4 has loosened the constraint on accumulation emanating from the raw materials sector, this constraint remains a powerful barrier. Another crucial condition for renewed capitalist accumulation which emerges from the previous discussion is that workers' expectations concerning the rate of growth of real wages will have to be revised downwards . This need arises because the historically achieved rates of growth of real wages outstripped productivity growth to produce a squeeze on profits and because the historically achieved productivity growth in several countries cannot be expected to be sustained as it was nurtured by an exceptional set of circumstances which will not be repeated .[20] Table 8 illustrates what has been happening to the rate of growth of productivity and real wages since 1973 in the major industrialised countries. Table 8

Changes in Real Wage and Productivity Growth Since 1972 UK

US

Germany

Japan

Italy

Deceleration of 1 .9 real wage rise (196272 average rise minus 1972-77 average)

1 .8

2 .1

2 .6

3 .9

Deceleration of 1 .8 productivity growth (1962-72 average rise minus 1972-77 average)

1.2

1 .0

5 .4

3 .5

Source :

OECD Economic Outlook, December 1978 .

Note :

All figures refer to economy wide averages and not just manufacturing . It can be seen from this table that in all countries there was a significant deceleration in wage growth, and in all countries except Japan this deceleration actually outstripped the deceleration in productivity growth . In this particular instance productivity growth has probably dropped by more than the usual amount associated with lower levels of capacity utilisation during a recession because, as outlined above, there seems to have been a fall in the underlying rate of growth of productivity in the latter

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part of the 1970s . This makes the deceleration in wage growth quite exceptional, because while the growth of wages frequently decelerates during a recession it does not typically decelerate by as much as the usual fall in productivity growth associated with lower levels of capacity utilisation . This exceptional containment of workers' wage aspirations between 1973 and 1977 probably goes a long way towards explaining the faltering revival of accumulation in these countries during 1978/9 .[21] Conclusion

This paper has drawn on a new source of empirical evidence, an OECD study, to document the severity of the 1970s' profitability crisis in the manufacturing sector of the major industrialised countries . It has also discussed the proximate causes of this profitability crisis . Rising capital/output ratios were significant contributors to falling profit rates in all the countries except Italy, and the discussion was concentrated on this aspect . There was no discussion of whether the capital/output ratio is a reasonable empirical proxy for Marx's organic composition of capital ; but if it is, then the OECD study provides important evidence in favour of the operation during this period of Marx's famous `Law of the tendency of the profit rate to decline' . Countries have suffered from this crisis in varying degrees, with the UK and the US at the two ends of the spectrum ; and it would seem that there is no unicausal explanation for the rises in the capital/output ratio . It was argued that the only common proximate cause of the rise in the capital/output ratio was the increase in the relative price of raw materials in the last part of the postwar period . In Japan and Germany the rise also resulted from a rather too slow adjustment of the pace of accumulation to the dwindling influence of two historically specific features, the surpluses of labour in the agricultural sector and the ability to borrow `new' technologies, which had permitted exceptionally high rates of accumulation during the early part of the postwar period . Additionally, in the UK and possibly in Italy and Japan the struggle over the translation of purchased labour power into labour which is embodied in goods (i .e . over the labour process) seems to have been crucially responsible for the rise in the capital/output ratio . It is hoped that this article will contribute to furthering the discussion on the prospects for renewed accumulation in the 1980s. A full discussion of this issue would require analysis which goes beyond the empirical level of this paper . Nevertheless, the paper has isolated the proximate relevant barriers to accumulation which capitalism encountered in the 1970s and thus points to areas of likely struggle as Capital attempts to restore the conditions for accumulation in the 1980s .

'OOTNOTES

1

C 12 F

I would like to thank Susan Rankin, Mike Williams, Simon Mohun, John Harrison and Jane Darby for useful comments on an earlier draft of this paper . The new source is Hill



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CAPITAL & CLASS 12 (1979), all profit rates are before tax . Some revisions to thiE data for the most recent years can be found in Trade and) Industry, 17 August, 1979 . 2 For example King (1975) uses profit shares, and while Glyn and Sutcliffe (1972) do use figures for the profit rate, it iE only for the UK . The Bank of England Quarterly Bulletin,) December 1976, 1978 and 1979 gives up-to-date data on thei profit rate in the UK, as does Trade and Industry (now British Business) in the August and September issues . 3 Rowthorne (1976) provides a simple example of this deficiency, where he has to cite incremental capital-output' ratios in support of his suggestion that there has been no tendency for the capital-output ratio to rise during the postwar period . 4 Marxian economics regards the profit rate as a central' variable, but of course, neoclassical economics regards it as just another relative price of no particular interest in itself . 5 For details on this, see Hill (1979) . 6 For details on the UK see Walker (1974) and Griffin (1976),1 for the US see Grose et al . (1966) . 7 Griffin (1976) . 8 See Bacon and Eltis (1974) and Griffin (1976) . 9 It is particularly useful to know that the fall in the profit rates arises not only because of the fall in the profit share but alsoi because of the rise in the capital-output ratio, as there isi some evidence that reduced taxes have offset the falling profit share before taxes (King (1975) and Nordhaus (1974))1 and so without the data on the capital-output ratio one could) not be sure that the falling profit share before taxes trans-i lated into falling profit rates after tax . 10 The manufacturing sector is focussed on both by orthodoxi theorists like Kaldor (1966) and Cornwall (1977), as well ass some Marxists who find that the service sector is inhabited) in varying degrees by unproductive labour . Unfortunately,! there is no comprehensive data on profit rates in the services sector . Where it does exist (for the UK, see Bank of England) Quarterly Bulletin, December 1979) it seems that there wasi only a marginal fall in profitability until the 1970s when itl dropped quite significantly . 11 For a useful summary, see Rowthorne (1976) . 12 One recent paper which has recognised the importance of these relative price changes is Weiskopf (1979) . 13 The explanation is also methodologically constrained . Ones crucial implication of the Cambridge capital controversy is that, in general, the price value of capital cannot be determined independently of the profit rate ; this means that ins general it is a methodological nonsense to talk about a rising I capital/output ratio being responsible for a falling rate oft profit . In certain circumstances, the price value of capital) may exist independently of the profit rate and such talk) begins to make sense . The discussion of this section isi couched in terms of an implicit assumption that such circum stances pertain, and accordingly occupies an unsatisfactorily I small methodological space . Nevertheless, it should be appre ciated that the factors discussed here have a much more i general applicability because, even if capital cannot be valued I independently of the profit rate, the factors identified still I

WORLD PROFITABILITY CRISIS

14

15

16

17

18

19

83

contribute to the formation of the profit rate by helping to define the physical production data which in turn set the boundaries for possible values of the profit rate . The justification for presenting the argument in a methodologically constrained manner is simply heuristic . A survey of the controversy is given by Harcourt and Laing (1971) and in this particular connection Hodgson (1974) is useful . In fact the evidence provided by the OECD study suggests that each country's production function is well behaved in a neoclassical sense, except for Italy's . Of course, the inverse relation between the two could result from capital revaluations, but unfortunately there is not the data on capital goods' prices to test this possibility . In principle, this discussion assumes that there is no change from one cycle to another in the degree of capacity utilisation . A drop in capacity utilisation typically leads with all other things held constant to a rise in the capital-output ratio . Hence a persistent rise in the capital-output ratio could be explained by a persistent fall in the level of capacity utilisation . There is no good evidence on capacity utilisation for the whole postwar period, but where it does exist (see Weiskopf (1979) and OECD Economic Outlook, December 1979) there does not seem to be any strong ground for supposing that there was a secular fall in capacity utilisation . Italy's investment/output data refers to Mining, Manufacturing, Construction and Electricity sectors and not just the manufacturing sector . The capital-output data for the 5th cycle in Italy only covers half the cycle from 1970-72 . See Pratten (1976) for example, and any attempt to explain growth differences in terms of observable economic variables, which typically fail to explain the UK's poor growth record (see Cornwall (1977) for example) . Sargent (1979) provides an explanation of the rising capital/output ratio in the UK without invoking this struggle as a contributory factor . This is not surprising because Sargent's paper is concerned only with the UK, whereas the empirical argument of this paper favouring a contributory role for this struggle is based on a cross-country comparison . There is an important and interesting question here concerning the different circumstances accompanying the drop in the pace of accumulation in Italy, and in Germany and Japan . It would take us beyond the confines of this discussion of proximate cause : but on the face of it, Japan and Germany seem closer to exemplifying the traditional Marxian explanation of accumulation itself being the cause of a rise in the capital-output ratio which lowers the profit rate and checks accumulation, whereas Italy seems to better illustrate a Neo-Ricardian model with a falling profit share leading to a declining profit rate which checks accumulation . This emphasis on relative price changes follows the more general emphasis on this factor in the more detailed paper on the US by Weiskopf (1979) . For a discussion of the failure of primary commodity prices to fall as much as might be expected since 1973/4, see OECD Economic Outlook, December 1979 . This is a partial discussion and underlines the need for further research in the area .



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CAPITAL & CLASS 12 20

For a more detailed discussion of the slowdown in productivity growth since 1973/4, see OECD Economic Outlook, December 1978 . 21 Of course accumulation recovered much earlier in the US, 1976 ; but this is hardly surprising as the earlier evidence has demonstrated that the profitability crisis was much less severe in this country than in the others . BIBLIOGRAPHY Bacon, R . and Eltis, W . (1974), The Age of US and UKMachinery, NEDO Monograph 3 . Cornwall, J . (1977), Modern Capitalism : its Transformation and Growth, Martin Robertson, Oxford . Glyn, A . and Sutcliffe, R . (1972), British Capitalism, Workers and the Profits Squeeze, Penguin, Harmondsworth . Griffin, T . (1976), `The Stock of Fixed Capital in the UK : How to make best use of the statistics', Economic Trends, October . Grose, L ., Rottenberg, I . and Wasson, R . (1966), `New Estimates of Fixed Business Capital in the US, 1925-65', Survey of Current Business, December . Harcourt, G . C . and Laing, R . F . (1971), ed ., Capital and Growth, Penguin, Harmondsworth . Hill, T . P . (1979), Profits and Rates of Return, OECD, Paris . Hodgson, G . (1974), `The Theory of the Falling Rate of Profit', New Left Review, 84 . Kaldor, N . (1966), Causes of Slow Rate of Economic Growth in the UK: an Inaugural Lecture, Cambridge UP, London . King, M . A . (1975), `The UK Profits Crisis : Myth or Reality', Economic Journal, March . Nordhaus, W . L . (1974), `The Falling Share of Profits', Brookings Papers on Economic Activity, I . Pratten, C . F . (1976), Labour Productivity Differentials within International Corporations, Cambridge University, Department of Applied Economics, Occasional Paper 50 . Rowthorne, R . (1976), `Late Capitalism', New Left Review, 98 . Sargent, J . R . (1979), `Productivity and Profits in UK Manufacturing', Midlands Bank Review, Autumn . Walker, J . L . (1974), `Estimating Companies Rates of Return on Capital Employed', Economic Trends, November . Weiskopf, T . (1979), 'Marxian Crisis Theory and the Rate of Profit in the Postwar US Economy', Cambridge Journal of Economics, December .

Debate CONFUSIONS CONCERNING SRAFFA (AND MARX) : REPLY TO CRITICS Sungur Savran . . the complete body is easier to study than its cells. Moreover, in the analysis of economic forms neither microscopes nor chemical reagents are of assistance . The power of abstraction must replace both . But for bourgeois society, the commodity-form of the product of labour, or the value-form of the commodity, is the economic cell-form . To the superficial observer the analysis of these forms seems to turn upon minutiae . It does in fact deal with minutiae, but so similarly does microscopic anatomy .' (K. Marx, Capital, Vol. I, Preface to the first edition, pp . 89-90 of Penguin, 1976 edition. Emphasis added) . Whilst the debate around the 'post Sraffian' critique of Marx on value often `seems to turn upon minutiae', Capital and Class considers it to be worthy of space for three main reasons : (1) We believe that Marx's value theory is a systematic attempt, by `The power of abstraction', to identify and analyse the forces and relations which condition the course of capitalist development, and thence the constraints and contradictions inherent in the struggles to transcend them ; (2) We wish C & C to reflect the many methodological perspectives which have contributed to recent debates in Marxist political economy, and hope that the debate around Sraffa's work will lead to the clarification of the different positions, including their views as to the relevance of formal logical and mathematical analysis vis-a-vis dialectical analysis-in ways which will make the issues clear to 'nonspecialists', (3) Whilst there are different opinions in the Editorial Committee as to the desirable `balance', we all feel that one of the strengths of C & C as it is now developing is that articles of more or less immediate political and empirical relevance appear alongside more abstract pieces, in which the relevance is more mediated.

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CAPITAL & CLASS 12 However, it is important that contributions (1) advance the debate rather than reiterating established positions ; (2) take seriously opposing methodological perspectives, and locate their analyses in terms of them, rather than feeling obliged to reconstruct from scratch an autonomous conceptual structure. It is in this context that we offer Savran's `Reply to Critics'. Given the object of my paper (1979), questioning the internal theoretical consistency of Sraffa's economics, it was hardly surprising to see that it drew criticism from two prominent followers of Sraffa . Both Steedman (1979) and Eatwell (1980) denouce my `confusions' and reject my conclusions, but for different reasons . Steedman condemns my entire reasoning and tries to demonstrate that my argument is formally incorrect at each and every significant link . Eatwell implicitly disagrees with Steedman : he states that on a purely formal plane my argument is `trivially correct' (1980, p . 156) but takes me to task for my inability to situate the theory of surplus-value (of which, according to him, Sraffian theory is only a specific variant) within the historical context of the capitalist mode of production . A salient feature of Eatwell's comment is that he brings in Marx in defence of Sraffa . In addition to these two comments, another paper by McLachlan, O'Donnell and Swales (1980 ; hereafter MOS) puts forth the position that my paper does point to shortcomings in Sraffa but that these can easily be rectified through a more careful reformulation of Sraffian economics . Considering the diversity of the lines of argument adopted by the critics . i t seems best, in this general reply, to first clear away those questions pertaining to the formal/logical correctness of my argument. Once these have been settled, we shall then turn to a brief discussion of the theoretical implications of the internal inconsistency of Sraffa's economics, an issue raised by MOS . A final section will be devoted to more substantial matters, especially the question, inevitably raised by Eatwell's intervention of the position of Marx's theory of value and surplusvalue within the framework of the present discussion . Before proceeding further, a few words concerning the concept `theoretical consistency' appear to be necessary . Theoretical criticism may take two distinct forms, A certain theory may, f irst . be criticised and/or rejected on the basis of its inadequacy in representing the essential aspects and laws of motion of the real world, due, among other things, to false abstraction, irrelevance, superficiality etc . This sort of criticism invariably bases itself on criteria of truth, adequacy etc. which are necessarily external to the theory in question, criteria which are either allegedly universal or which derive from the elements of another, alternative theory . An altogether different line of criticism, not necessarily unrelated to the first but itself an autonomous discourse, considers the mutual consistency (coherence) of the various component



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parts, and in particular the premises and conclusions, of a theory . The specific nature of this sort of criticism is that it judges the theory in question according to that theory's own standards . Since no criticism is offered with respect to the `realism' or `adequacy' of the concepts, abstractions, propositions etc . of the theory, what is in question is solely its internal theoretical consistency . This internal consistency cannot, and should not be reduced to a certain formalistic mathematical consistency, nor even to a purely logical one . Theoretical consistency, as I understand it, refers first and foremost to the capacity of a theory to offer acceptable solutions to the very tasks it sets itself . In this sense it certainly requires simple logical consistency (and mathematical consistency as merely a form of the latter) but transcends it by incorporating a harmony between its questions and its answers . My earlier paper does not concern the mathematical consistency of Sraffian economics but aims to point out that this theory fails precisely in establishing such a harmony, that it cannot provide tenable solutions to the problems it puts forward . (See Savran, 1979, pp . 131 and 137 .) I shall try to show, in the last section of this paper, that this failure is due to the fundamental inadequacy of the Sraffian framework as a theory of a definite historical mode of production, hence transgressing my earlier self-imposed limits and suggesting, however briefly, some elements of an external criticism . Steedman's argument can be resumed in the following two statements : (1) my objections to all three alternative methods of fixing the independent variable in Sraffa's system are unfounded, and (2) there is, in fact, a fourth alternative recommended by Sraffa, which would, in any case, be immune to these objections . My purpose here is to show that both of these statements are incorrect . Let us then turn to the three alternatives . The wage as an aggregate of commodities : My argument 1 concerning this method was based on its incompatibility with the existence of the standard commodity . Steedman, while conceding the incompatibility of the two, contends that `the Standard Commodity is not essential to any part of Sraffa's argument' (1979, p . 71, emphasis added) and that, therefore, the wage can be fixed through this method .[1] Now, it is an easy task to show that the standard commodity is essential to certain parts of Sraffa's argument . Of a multitude of different ways of doing this, I will adopt one based on Steedman's own definition of Sraffa's purpose, which `was, in part, to examine how wages, profits and prices vary together' . (ibid .) Now, Steedman agrees that ` . . . under joint production . . . the inverse relationship between the wage and the rate of profit no longer necessarily holds . . .' (ibid.)unless the standard commodity is the measure of value .[2] What this implies is that, if there is no standard commodity to be used, with different measures of value, the same variation in the wage bundle may in some cases appear as either a rise or a fall in the wage and, therefore, cause either a fall or a rise in the rate of profit . Thus,

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CAPITAL & CLASS 12 given a certain variation of the wage bundle, it is impossible to predict the movement of the rate of profit rigorously . The obvious conclusion is that Sraffa's theory cannot, in such cases, examine `how wages, profits and prices vary together .' For Sraffa's purpose, therefore, the standard commodity is indispensable . Another way of seeing this is to remind oneself of the supposedly most important contribution of Sraffa's framework to a materialist analysis of the capitalist econony : it has shown, in Steadman's words, that `the methods of production, together with the given . . . real wage rate, suffice to determine the rate of profit (and the associated prices of production)' .[31 But with joint production, if the standard commodity is not the measure in terms of which prices are expressed, the same real wage rate may, in certain cases, correspond to various different rates of profit ; hence, from information regarding the technical conditions of production and the real wage, one cannot determine a unique rate of profit and the associated prices . It is thus clear that for an integral part of Sraffa's argument, the standard commodity is indispensable . Yet from the way Steedman quotes Sraffa's own remark in this respect, the reader may get the spurious impression that Sraffa's view of the standard commodity contradicts mine . It is, therefore, as well to take a fuller view of what Sraffa says at the relevant point : `Whilst the central propositions had taken shape in the late 1920s, particular points such as the Standard Commodity, joint products and fixed capital, were worked out in the 'thirties and early 'forties' . (1960, p . vi, emphasis added .) Hence, Sraffa does not say that his treatment of joint production and fixed capital, and of course of prices, profits and wages in the presence of these elements, has preceded in time his construction of the standard commodity . What he says about the chronological development of his work does not, therefore, at all contradict what I said in my earlier paper, namely that `those who hold [that the standard commodity is not indispensable] . . . are also, thereby, advocating that Production of Commodities be cut down to its first part, that the whole analysis regarding joint production, fixed capital and rent be discarded' (1979, p . 134) . There certainly remains the fact that Sraffa characterises the standard commodity as a `particular point', but this in no way implies that it is `secondary' or `inessential' . According to Roncaglia, to whom Steedman refers on several occasions, `the "particular aspects" are obviously not simple accessories, inasmuch as they are necessary for the completion of the argument' (1975, p . 67, emphasis added) . To sum up, that the central propositions `took shape' chronologically before the standard commodity was worked out does not imply that logically the latter is not necessary to prove these propositions in the presence of joint products and fixed capital . 2 The wage as a price : Steedman attempts to refute both of my objections to this method of fixing the independent variable . The first question in this respect is whether a technological improve-

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ment in the production of a necessary does or does not influence the rate of profit if the wage is given as a price . Steedman characterises my `No' with respect to this question as `quite simply false' and proceeds to `prove' this by breaking up the problem into different cases . In the first case, where the necessary is a basic in another capacity, i .e . as means of production, [4] Steedman's contention is, of course, correct but irrelevant to the argument . It is irrelevant because my refutation aims at Sraffa's solution for those very necessaries which are relegated, according to Sraffa himself, `to the limbo of non-basic products . . . no longer appearing among the left-hand side of the equations' (1960, p . 10) . By invoking a case where the necessary in question is a basic in another capacity, Steedman sets up a situation where the product still appears on the left-hand side of the production equations, which situation is precisely what Sraffa, and therefore I in my criticism of his reasoning, have excluded from the field of investigation . Since my `No' does not concern this case, it cannot be refuted by recourse to it.[51 As to Steedman's second case, where the necessary is not a basic in another capacity but is included in the standard of price, this is relevant to the question at hand but wholly incorrect . It is incorrect because Steedman simply reiterates Sraffa's own view, adopting Roncaglia's reformulation of it . But this is precisely what I have criticised and rejected on the basis of a clear and logical argument (1979, p . 134 and note 7) . Steedman is entirely silent regarding this argument and simply repeats what I have shown to be an inadmissible position . My second point with respect to this method was that when the wage is given as a price before the prices themselves are known, there is nothing to guarantee the accrual of a subsistence bundle to the workers . Steedman agrees-but again belittles the significance of this . His reason is that `there is a precisely defined maximum viable profit rate and a minimum viable wage rate in terms of any standard of price' (1979, p . 73) . This argument is fallacious for two different reasons . First, a minimum wage rate cannot be determined in the abstract for the precise reason that the wage, in Sraffa's own words, `does not acquire a definite meaning until the prices of the commodities are determined' (1960, p . 33) . In order to be able to do this, one would, prior to all determination, have had to solve the system for all possible levels of the wage rate to see over what range it does not satisfy the requirement of minimum subsistence ; one would, therefore, have to assume complete and perfect information on the part of the agents of capitalist production on the relationship between an abstract price and quantities of commodities which could be obtained at this price, before the prices are known . But let us suppose that Steedman himself set out to calculate all these different levels of the wage, profit rate and prices . He would immediately realise that he is face to face with an impossible mission : he would find out that were it meaningful to postulate the specification of a minimum wage through whatever

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CAPITAL & CLASS 12 mechanism, there would be no such rate to be specified . The reason is simple : in joint product systems, that is in all systems employing fixed capital in Sraffa's scheme, the price of a commodity may fall faster than the wage . If the commodity in question is a necessary, a fall in the wage as a price may result not in a decrease, as is to be normally expected, but in an increase in the bundle of commodities which it is possible to buy with the given wage .[6] This implies that while a lower wage may purchase the subsistence bundle, a higher wage may not . Hence, in certain cases, there is no `precisely defined . . . minimum viable wage rate' and Steedman's objection falls .[ 71 3 The rate of profit : Since my objection to this method was, at a first level, analogous to my criticism concerning the wage as a price, Steedman considers it to be refuted along with the latter : that is, there can always be specified a maximum rate of profit corresponding to the minimum wage which he believes could be calculated . But it has already been shown that, in certain cases, there is no definable minimum wage and hence no corresponding maximum rate of profit that can be specified, i .e . while a certain rate of profit may be `viable', a lower one may not . There is also no conceivable mechanism which could set such a ceiling to the level of the rate of interest, excepting perhaps an altruistic selfdiscipline of greedy capitalist financiers . Furthermore I have already pointed out that there is nothing to guarantee the consistency of a rate of profit determined in total independence from the system of production with the system of production itself `even if the wage were reduced to zero', (Savran, 1979, note 11) an argument which Steedman ignores.[8] This last argument implines that the method of fixing the rate of profit as inadmissible, irrespective of the specifiability of a minimum wage .

The so-called `fourth alternative'

There is, in Steedman's criticism of my paper, however, one point which helps to take the debate forward and that is his discussion of a so-called `fourth alternative', recommended by Sraffa . This method involves the separation of the two components of the wage, taking the necessary component as fixed and the surplus component as variable . The reason why I did not take this up in my earlier paper is that, besides being highly incompatible with capitalist reality, it is, in Sraffa's presentation, not an independent alternative, but a variant (a 're-interpretation' in Steedman's words) of the first method, where the wage is given as an aggregate of commodities . Nevertheless, it now seems to be necessary to deal with it as a special case . This special case, though, is no more consistent than the ones previously discussed . To see this, we first have to show that in Sraffa's presentation it is indeed a variant of the first method . Since in Sraffa's view of this method, the necessary commodities `would continue to appear . . . among the means of production' (Sraffa, 1960, pp . 9-10), that is, the necessary wage is specified as an aggregate of commodities, it is obvious that the surplus component must also be given in the same way, so that this

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method is nothing but the first one with the two components separated . Once this is established, though, the analysis again runs into contradictions : the surplus part being specified in terms of commodities, the production conditions of these products will necessarily influence the rate of profit . From here two alternatives : either, these are non-basics but then, contrary to what Sraffa claims, some non-basics do influence the rate of profit, or, since such a contradiction is inadmissible, these are basics on an equal footing with necessaries . In the latter case, these products become part of the input structure . But since the surplus component is variable by assumption, with every change in this component, the input structure of the system changes, so that it becomes impossible to construct a standard commodity for the system in question . Having already discussed the absolute necessity of the standard commodity for a rigorous formulation of Sraffa's economics, we can conclude that Steedman's fourth alternative is no sounder than the first three . The reader will already have noted that this difficulty is identical with the one encountered in the case of the first alternative, 'a fact which again points to the affinity between these two methods . Although the above argument is sufficient to take care of the method in the only version in which it appears in Sraffa's own work, it may be advisable, lest there remain any doubts, to say a few words on other conceivable versions of the same method . One such possible version is the one adopted by Roncaglia (1975, Capitolo iv), where the (separated) components of the wage are both given as prices . But this whole project is rendered impossible by the fact, argued in detail above, that in certain cases the necessary wage cannot be specified as a price unless the prices of the commodities are themselves known beforehand for every level of the wage-which is precisely what is to be determined by giving the wage independently . Finally, the third conceivable version, where the rate of profit is given independently but the subsistence commodities are included among the means of production, does not help either owing to the fact, argued above and in my earlier paper, that the problem of the incompatibility of an independently determined rate of profit with the system of production remains even if no wages were paid . In this case, of course, whether one does include the subsistence commodities among the inputs of production or not becomes irrelevant . The `fourth alternative' thus fails to supply a coherent answer to the requirements of Sraffa's economics even in those versions not invoked by Sraffa himself . The question of a reformulation

There are several points of convergence between the position set forth in the MOS paper and my own stand : the authors are careful to avoid several pitfalls existing in Steedman's argument, [9] especially that regarding the postulation of a minimum wage . They also reject the `fourth alternative' as a solution to the problems invoked in my paper, although on different grounds . Finally, they agree that my argument does point to the existence of

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shortcomings in the original formulation of Sraffian theory . However, they disagree on two important points : first, they contend that Sraffa's theory is not internally inconsistent but merely underspecified, a shortcoming which can be rectified through a reformulation which amounts to adding certain assumptions to the existing theory . Secondly, they are of the opinion that even if Sraffa's theory were proved to be inconsistent, that would not have been sufficient for concluding that it should be abandoned . I, of course, agree that formal reasons alone are not decisive in accepting or rejecting a theory : this is why I have tried explicitly to stress the vital importance of epistemological and methodological criticism in an overall critique of Sraffa (Savran, 1979, p . 131) . However, having themselves asserted that internal consistency is a necessary, although not sufficient, condition for the acceptance of a theory (1980, p . 164), MOS will certainly agree that unless Sraffa's economics can be reformulated in a theoretically rigorous manner, it cannot be accepted as a valid theory . Therefore, the core of our divergence really hinges on their first prop( ition regarding the possibility of `pruning' (i .e . the reformabili , of) the Sraffian structure . On this question it is rather baffl, g to find MOS contending that they have proposed an `alternate e formulation of Sraffa's theory which explicitly takes into ac ount the need to reproduce the workforce' (1980, p . 163) . SinLe they themselves have rejected Steedman's statement that it is possible to specity a minimum wage rate for every economic system, it is difficult to understand how they can assume, in their own alternative formulation, that a certain w a , an abstract price, is sufficient to buy a subsistence set of commodities . We have to conclude that the ad hoc reformulation conceived by MOS does not in fact provide sufficient basis for their contention that they have produced `a consistent, more highly specified system which is immune to Savran's attempted criticisim' (1980, p . 164) . Not only is Sraffa's theoretical structure inconsistent in its original formulation ; it is equally not susceptible to a rigorous reformulation which would make it at least formally acceptable . Marx in defence of Sraffa

With the discussion of Eatwell's intervention, we leave this field of formal consistency and enter more substantial matters . To summarise briefly the thesis he puts forward : his main contention is that my attack on the theoretical consistency of Sraffa is, in fact, an attack on `the fundamental proposition of all theories of surplus-value', since the independent determination of the annual social product [10] and one of the variables of distribution is, according to him, a hallmark not only of Sraffian economics but also of Marx's theory of value and surplus-value (Eatwell, 1980, pp . 155-6) .[11] If, therefore, I were correct in criticising Sraffa, that would imply that Marxist theory itself is inconsistent . But fortunately enough for Marxists, Eatwell proves that I am mistaken, for I have failed to understand the location of the theory of surplus-value within the context of the capitalist

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mode of reproduction (the social productivity of labour), the distribution of income, and the size and content of net social product are related to one another . . .' ( ibid, pp . 156-7) . In order to show that Marx's theory is, contrary to Eatwell's belief, immune to the sort of criticism I have earlier directed at Sraffa, one has to go to the roots of the internal inconsistency to be found in the latter, that is, one has to identify that specific aspect of Sraffa's scientific method that generates a theoretical structure which is incoherent . Eatwell's above quoted characterisation of the context of the capitalist mode of production serves well as a starting point in order to reach the roots of Sraffa's failure . It is my contention that (1) Sraffa's theory is internally inconsistent precisely because it does not take into account the relationship between the `distribution of income' (i.e . the magnitude of the wage) and the `size and content of net social product' (i .e . the magnitude of annual social product or 'value -product') . It is constructed on the basis of the mutually independent determination of these two magnitudes, which in the real capitalist world are related to one another, and fails precisely because where an interdependence exists it postulates independence . (2) In contrast, Marx's theory is immune to the criticism thus directed at Sraffa precisely because his theory of surplus-value not only takes into account, but is actually premised upon, this relationship . (3) Finally, this difference between the two theories derives from a more fundamental divergence, that relating to the radical difference in the scientific method employed by the two authors . Little need be said with respect to the first proposition above : it is evident upon a brief inspection of Production of Commodities that Sraffa starts his analysis from a given technological matrix which immediately defines the magnitude of the annual social product which it is possible to produce on the basis of a given labour force, this magnitude being totally independent of the size of the wage paid to the workers . He then fixes one of the variables of distribution-hence determining the magnitude of the wage this time in total independence from the magnitude of annual social product . This mutual independence is what gives rise to a simple logical problem : in Eatwell's words, `if two magnitudes are independently determined then there is no a priori reason to suppose one to be greater or less than the other . . .' (1980, p . 156) . Entirely different is Marx's procedure in his theory of surplus-value . Having constructed a theory of exchange-in-general through an analysis of value as a social relation of production between commodity producers, he bases his investigation of the production of surplus-value on the specificity of the exchange between capital and wage-labour . In this exchange, the value of labour-power is assumed by Marx to be given `in a given country at a given period' (Marx, 1976, p . 275) .[121 Eatwell constantly reiterates this same point, forgetting that in order to prove his thesis he has to show that in Marx there is the independent deter-

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CAPITAL & CLASS 12 mination not only of one of the variables of distribution but also of the magnitude of the annual product of society . This is the very heart of Marx's difference from Sraffa on this specific matter . Having paid the independently fixed value of labour-power, the capitalist is now in possession of its use-value, a very specific use-value, that of creating exchange-value . He can hence force the worker to prolong the working day beyond that point where he has just reproduced the value of his labour-power : that is, he can compel him to perform surplus labour and thereby create surplusvalue, over and above the independently fixed value of labourpower . This, the process of valorisation, guarantees that the newly created total value is necessarily greater than the mere value of labour-power . These two magnitudes are thus not mutually independent in Marx and the contradiction that arises in Sraffa does not, therefore, arise in his theory . To put it in terms closer to Eatwell's, it is perfectly true that in Marx's theory, the value of labour-power one of Eatwell's 'distributional parameters' (although we shall presently see that this is not a correct characterisation in the case of Marx) is equally determined as an independent magnitude but the value of the annual product, i .e . the newly created value is not . It should be noted in anticipation of a possible objection that the independently fixed value of labour-power can never be equal to or greater than the maximum amount of total new value which can be produced under the existing historical conditions, for the simple reason that this would imply the non existence of surplus-value, the raison d etre of capitalist production . Marx is explicit on this point : `It is obvious that if the labourer needed his whole day to produce his own means of subsistence . . . there could be no surplus-value, and therefore no capitalist production and no wage-labour . This can only exist when the productivity of social labour is sufficiently developed to make possible some sort of excess of the working-day over the labour time required for the reproduction of the wage-i.e . surplus-labour, whatever its magnitude .' (Marx, 1969, p . 406 . See also Marx, 1073, p . 321 .) This simply means that in order for capitalism to exist, a necessary, but certainly not sufficient, condition is a certain degree of social productivity . This actually is a premiss of all theories of capitalism, taking the form of the assumption of `production with a surplus' in Sraffa's case . It is perhaps advisable to stress that the charge of inconsistency concerning Sraffa is entirely independent of this condition : that is, granted this condition, common to all theories, Sraffa's structure is still incoherent . We can now briefly turn to the third proposition : Marx can relate the two magnitudes in question only because his aim is to investigate the relations of production prior to the relations of



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distribution . His analysis is so conceived as to lay bare the mode in which surplus-value, and consequently capital as a social relation, are produced . The question of the appropriation of surplusvalue, i.e . the question of the distribution of the income thus generated, is secondary and its analysis is therefore predicated upon a correct understanding of the question of its production . This, of course, requires that the dialectical nature of the capitalist production process as the immediate unity of a labour process and a valorisation process be grasped . Sraffa, in contrast, takes the social forms of the capitalist mode of production as granted and cannot, therefore, grasp the specificity of the capitalist production process . His postulation of a technological matrix as the starting point forces him to regard this process as a simple labour process, subject to no specific social/historical determination . The distribution of the surplus created through this labour process is, on the other hand, necessarily social . Hence the rupture operating in Sraffa between the process of production and the process of distribution : having suppressed one of the poles of the dialectical unity that is the capitalist production process, Sraffa is left with a surplus the magnitude of which is determined independently of the relationship of the two classes, between which, precisely, this surplus is now to be distributed . There is, of course, no reason why the distribution of this surplus should be consistent with its production . The inconsistency of the wage and the annual product is but the form of appearance of this more fundamental problem in Sraffa's method . Sraffa's procedure is, in fact, akin to what Marx condemned in Ricardo a long time ago : ` . . . what [Ricardo] has available is a definite amount of objective labour time, which may of course increase, and he asks himself, how is it distributed? The question is rather the specific nature of the relation of capital and labour, or the specific and distinct character of capital, which explains this . . .Capital is represented as appropriating a certain part of the ready and available value of labour (of the product) ; the creation of this value, which it appropriates above and beyond the reproduced capital, is not presented as the source of the surplus-value .' (Marx, 1973, p . 553 . Emphases in the original .) There is perhaps little need to add that, contrary to Eatwell's assertions, my argument does not lead towards neoclassical theory . For it has been shown above that my criticism of Sraffa is not, and cannot be represented as, a condemnation of Marx's theory of surplus-value .[13] If anything, it provides further evidence that Marx's theory is the only consistent and meaningful theory of the capitalist mode of production .

Conclusion

The arguments put forward in this note may create the inpression that Sraffa's theory is in fact much closer to neo-

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CAPITAL & CLASS 12 classical economics than is supposed, in the sense that the only escape route for it is the adoption of a method of simultaneous determination of prices and distribution in the tradition of general equilibrium theory . This is in my view somewhat misleading : fixing one of the variables of distribution independently is an element that defines the very specificity of Sraffa's procedure . What is in question here is not Sraffa's affinity to neoclassical economics, a point that can well be argued along other lines, but the theoretical consistency of his very specific structure . Attempts by the defenders of Sraffa to salvage his theory from this charge of inconsistency have turned out to be unsuccessful . I have tried to show in this paper that the arguments I have earlier put forward are logically sound, that Sraffa's theory is not only deficient but also not susceptible to a rigorous reformulation and that there exists a radical divergence between his approach and that of Marx, whose theory is therefore immune to the criticism formulated against Sraffa .

NOTES

The for 1 2

3 4 5 6 7 8

author would like to thank the readers for Capital and Class useful comments on an earlier draft . Eatwell (1980, p . 155) is evidently of the same opinion . Savran (1979, p . 133) . The final phrase concerning the standard commodity asserts a necessary condition for the correctness of the statement preceding it . Since this is recognised by Steedman, it is strange of him to say (1979, pp . 71-2) that `the phrase "in the absence of the standard commodity" introduces nothing but confusion' . Steedman (1977, p . 102) . See also Hodgson (1977, p . 104) . Where, to use the words of Roncaglia (1975, p . 56), it is `technologically basic' . See McLachlan et al . (1980, p . 161) for a similar argument . It should be noted that this statement is true whatever standard of price is used . The same point is made by McLachlan et al . (1980, p . 163 and specifically Figure 2) . In a long footnote, Eatwell refers to this argument as if I myself were contending that the rate of interest may exceed the maximum possible rate of profit in the real capitalist world . This is an obvious distortion since the context (see Savran, 1979, note 11) makes it crystal clear that my intention is to show how Sraffa's scheme can lead even to such absurd conclusions . Equally in the same footnote, Eatwell makes the startling assertion that Sraffa only takes the real wage or the rate of profit as the independent variable, never the wage as a price . In fact, however, the only case where Sraffa presents the wage in real terms is a trivial one not requiring an independent variable . In all cases where there is a need for an independent variable, he fixes either the rate of profit or the wage as a price . This quite elementary point was taken up explicitly in my earlier paper (1979, note 12) . Though seemingly minor, it is in fact important because Eatwell's erroneous view is widely shared by other writers in the Sraffian tradition .

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9 See the text for notes 5 and 7 above . 10 Eatwell's own terminology is distinctly Sraffian : he labels , net social product' or `value of net product' what in Marxist terminology would respectively be called `annual social product' or 'value-product' (Marx, 1976, p . 321) . This would certainly create no problem were it not for the fact that Eatwell uses this terminology precisely when referring to Marx's conceptual structure . This creates serious confusion : the first concept, in Marx, stands for a certain portion only of the annual social product, so that the two are definitely not interchangeable within the Marxist framework . 11 Eatwell presents another formulation of my position, which is highly misleading : `The core of Savran's position is that it is not possible to express, as an independent variable, either the wage or the rate of profit in a manner which will ensure that it is consistent with the reproduction of given conditions of production . Hence a theory of value and distribution which rests on the proposition that one of the distributional parameters is an independently given magnitude is "theoretically inconsistent" .' (1980, p . 155) . This is certainly not the case : I nowhere hold that every theory which takes the wage as given is inconsistent . What I do contend is that any theory which determines the wage and the magnitude of the annual social product in complete mutual independence is bound to end up in incoherent (unless the wage can be given as an aggregate of commodities as in the case of Ricardo) . This mutual independence is precisely the case of Sraffa . 12 This assumption that the value of labour-power is a fixed magnitude, determined by the needs of the reproduction of the working class, is provisional, adopted merely for the analysis of the existence of surplus-value, and is later to be discarded during the investigation of the determinants of the value of labour-power and of its price, i .e . wages . (See Lebowitz, 1977-78, for an excellent treatment of this question .) However, this is not the main point : whether provisionally or not, in his analysis of surplus-value, Marx does assume, as Eatwell correctly points out, that the value of labour-power is a fixed magnitude . 13 The neoclassical proposition, which, it should now be clear, has nothing in common with my position, is based on the statement that, for the English theory, of which, according to Walras, Ricardo is the founder (Walras, 1954, p . 398), it is `the price of productive services that determines the price of the products' (ibid, p . 425) . This statement by Walras is probably the greatest single distortion of a rival theoretical stance in the history of economic ideas . Far from advocating this view, Ricardo's main preoccupation was, in fact, to combat and refute such an idea, to be found in Adam Smith, although in a considerably different form (Smith, 1970, p . 158) . Ricardo's own theory rests on the proposition that the value of commodities is regulated by `the quantity of labour bewstowed on [their] production' (Ricardo, 1971, pp . 55-63) and not by the price of `productive services', which, for the rest, do not even exist in Ricardian theory . And this is what Eatwell characterises as `somewhat more perspicuous' (1980, p . 157) than my argument!

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BIBLIOGRAPHY

Eatwell, J., 1980, 'On the Theoretical Consistency of Theories, of Surplus Value : A Comment on Savran', Capital and Class,, 10, Spring . Hodgson, G ., 1977, `Papering over the Cracks', The Socialist I Register. Lebowitz, M . A ., 1977-8, `Capital and the Production of Needs', Science and Society, v . XLI, No . 4, Winter . Marx, K ., 1969, Theories of Surplus Value, Part II, Moscow and I London . Marx, K, 1973, Grundrisse, Harmondsworth . Marx, K ., 1976, Capital, v . I, Harmondsworth . McLachlan, H . V ., O'Donnell, A. T. and Swales, J . K ., 1980, 'On i the Logical Consistency of Sraffa's Economic Theory : A i Comment on Savran and Steedman', Capital and Class, 10, Spring . Ricardo, D ., 1971, On the Principles of Political Economy and I Taxation, Harmondsworth . Roncaglia, A ., 1975, Sraffa e la teoria dei prezzi, Bari . Savran, S ., 1979, 'On the Theoretical Consistency of Sraffa's Economics', Capital and Class, 7, Spring. Smith, A ., 1970, The Wealth of Nations, Harmondsworth . Sraffa, P ., 1960, Production of Commodities by Means of Commodities, Cambridge . Steedman, I., 1977, Marx After Sraffa, London . Steedman, I ., 1979, 'On an Alleged Inconsistency in Sraffa's Economics', Capital and Class, 9, Autumn . Walras, L ., 1954, Elements of Pure Economics, London .

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In and Against the State The London Edinburgh Weekend Return Group, a working group of the CSE In and Against the State, revised and considerably expanded to include a substantial postscript on Conservative economic tactics and new possibilities of resistance . 86104 327 8 £2 .95 pbk Pluto Press, Unit 10 Spencer Court, 7 Chalcot Road, London NW1

Debate

A BRIEF NOTE ON SOVIET ECONOMICS Jonathan Schiffer In Capital and Class 8, Derek Sayer reviewed Mao Tsetung's writings on Soviet socialism encorporated in the recent Monthly Review publication, A Critique of Soviet Economics (1977) . Sayer noted that the texts `are important historical documents with much light to shed', but he decided to emphasise `their theoretical rather than their archival value' (p . 113) and concentrated on Mao's critique of `the theory of the productive forces' whereby Bolshevism-ostensibly following in the footsteps of the Second International-reduces Marxism to a more or less crude technological/economic determinism . In criticising this alleged tradition, Sayer emphasises the important role played by communist ideology in striving to build socialist societies . However, in constructing his argument, he seems to have over-emphasised this point to the extent of detaching `politics' from `economics' and subsequently `freeing ideology' so that it can float away from `politics', unencumbered by the humdrum demands and constraints of everyday material and political life . This process begins with Sayer's failure to note the distinctions between the two texts that Mao was criticising . Mao's 1958 critique of Stalin's work (Economic Problems of Socialism in the USSR) is lumped together with his 1961/62 critique of the Soviet textbook, Political Economy (first published in 1955 and subsequently updated so that Mao was, in fact, dealing with the 3rd edition) . Stalin's work, while noting the need to proceed cautiously in terms of existing commodity circulation within Soviet society . stressed the ultimate irreconcilability of and contradictions between the two existing forms of property relationships (state versus collective farm) and analysed the tensions these caused for the planned regulation of the Soviet economy . The latter (1955) work, written and updated at the height of Khruschev's influence, attempted to theorise away any contradictions in Soviet society by postulating `the state of the whole people' . These differences are symptomatic of a wide range of theoretical and practical differences which distinguished the Stalin period from the Khruschev years . Having apparently ignored the crucial changes which characterise Soviet history, Sayer then further jeopardises the legitimacy of his analysis by presenting Mao's pronouncements outside of the context of contemporary Chinese political and economic history . By proceeding in this fashion, Sayer fails to note the historically specific and conditioned nature of Mao's remarks .[ 1] In 1958, Mao presented a thoroughly one-sided criticism of Stalin's work, praising those passages justifying the survival of socialist commodity production and ignoring those passages

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CAPITAL & CLASS 12 cautioning the need to limit, control and ultimately abolish it .[2] He further supported Khruschev's policies which enlarged the sphere of collective property (the selling of the Machine Tractor Stations to the Kolkhozy) and indicted Stalin for his `mistrust of the peasants' . These comments were made within the context of the Great Leap Forward, with its emphasis on decentralisation of economic control and low taxation and procurement levels to encourage local resource development by the peasantry . They were no doubt intended to dampen any excesses of ultra-Left enthusiasm for `instant communism' which could damage a worker-peasant alliance already under considerable strain from the great social experiment in the Chinese countryside [ 3 ] . However, by attempting to maintain political balance in the country as a whole, Mao opened himself to attacks from the Right wing of the Chinese Communist Party, who, with Khruschev's blessings, criticised the whole approach of the Great Leap Forward in the aftermath of the severe economic setbacks of the period . In the face of deteriorating economic and political events . Mao suddenly developed a newfound respect for the contradictions and tensions that Stalin had stressed in his work, suggesting that `I have spoken twice at Changchow on the question of Stalin's Economic Problems of Socialism . But these were only speeches . Now one must study it in depth, otherwise we cannot develop and consolidate our cause' . [4] This new interest in vulgar Stalinist theory was complemented (in his 1961/62 writings on the Soviet textbook) by attacks on the Khruschevite emphasis on the extended scope of operation of the law of value under socialism [5] (which, if used as a standard of judging success, would have rendered most of the Great Leap Forward a disaster) and the `trust of the peasants' that was embodied in the theoretical rapprochement between collective and state property relations .[6] Under the twin pressures of material setbacks and political attack, Mao had indeed completed a remarkable theoretical about-turn . It is in these specific events that one can find the underlying causes for these `high points of what is arguably the most serious and furthest reaching attempt to theorise the historical experience of socialist construction that marxism has yet produced' .[7] In ignoring them, Sayer runs the risk of misrepresenting Mao, who was certainly aware of and sensitive to changing political-economic circumstances ; indeed, the texts under consideration are excellent examples of `putting politics in command' and in this respect, rival some of the classic works of both Lenin (eg . State and Revolution) and Stalin (eg . The

Foundations of Leninism) . It would seem, then, that Sayer's presentation has not only freed `ideology' from the constraints of `mechanical materialism', but has significantly overemphasised its `relative autonomy' . Such an approach runs the danger of simplifying and ultimately misinterpreting the complex reality of socialist societies . For instance, it is quite misleading to suggest that the ultimate futility



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of the Bolshevik approach to Socialism (depicted as the ultimate denigration of political attention to `the producers' own willingness and ability to increase production by transforming their social relations') is directly reflected in the comparative figures for production on the kolkhoz lands as opposed to private peasant plots .[8] In depicting the discrepancies between acreage and value of output as reflective of low class consciousness amongst the Soviet peasantry (or rural proletariat), itself resulting from the inadequacies of Bolshevik political practice, Sayer overlooks the fact that there is a ceiling on prices of public sector agricultural procurements and a free market for produce from the private sector and, as a result, the contribution of public agriculture to the USSR's net material product is usually taken to be undervalued .[9] If one followed the logic of Sayer's approach, one would have to say that any significant rise in peasant incomes and public sector agricultural output during the Brezhnev years was due mainly to greater socialist consciousness rather than to the `mere' improvement of state procurement prices and investments in agriculture . In sum, it is certainly a necessary (and necessarily difficult) task to `theorise' the experiences of the socialist societies . However, such a project must be gounded in the basic facts-political and economic, historical and contemporary-that provide the proper context for evaluating and improving socialist theory . NOTES

1

2 3 4 5 6 7 8

9

Some of the following points are raised, in a different context, by Manus O'Riordan in the May and June, 1979 issues of The Irish Communist . Mao Tsetung, op . cit., pp . 130-145 . This view is put forward by J . Peck in the `Introduction' to Mao Tsetung, ibid . p . 23 . From `Speech at Lushan Conference' (July, 1959) in Schram (ed .), Mao Tse Tung Unrehearsed, Penguin, 1975, p . 146 . Mao Tse-Tung, op . cit . pp . 87, 88 . Ibid, pp . 53-68 . Sayer, op cit . p . 113 . Sayer quotes 1967 estimates for 2 .9% of Soviet arable land, consisting of private plots, producing 26% of total agricultural output ; cf . ibid, footnote 28, p . 124 . There are other factors in the public-private, acreage-value ratio : an implicit division of labour between collectively worked lands and private plots historically assigned the high value meat and dairy products to the private sector ; the public sector also provides many free inputs into the private sector's production, etc . The complex interrelations between the two sectors (and the reasons for rejecting the kind of figures Sayer puts forward) are detailed in Wadekin, K . E ., The Private Sector in Soviet Agriculture, University of California, 1973, cf . especially Chapter 7 .

Debate

STANDING PASHUKANIS ON HIS HEAD Ronnie Warrington Peter Binns has performed a useful function in drawing Pashukanis's work to the attention of Capital and Class readers . [1] Pashukanis is essential reading for those concerned with the nature of legal control in capitalist society, with the problems of moving to socialism, and above all with the potential for a classless society, a non-legal social order. I do not want for a moment to suggest that there is room for only one interpretation of a book as complex and rich as Pashukanis's The General Theory of Law and Marxism . However, I do think that Peter Binns has presented at best a one-sided summary of Pashukanis and it might be useful if another view could be outlined . The most surprising aspect of Peter Binns's paper is not what it says, but what it omits . Pashukanis was concerned above all with demonstrating not the importance of law, but its irrelevance to full communism as sketchily described by Marx in his Critique of the Gotha Programme . Binns is concerned to stress Pashukanis's commitment to technical regulation as a replacement for law . This, says Binns, is authoritarian and elitist . It leads to a form of `imposed socialism' which is clearly a contradiction in terms . But in fact, what concerned Pashukanis most was planning as a counterpart to law . The plan as Pashukanis envisaged it had little to do with authoritarian structures . Planning was the necessary opposite of the anarchy of production of the capitalist market . Of itself, the concept of socially-organised attempts to satisfy the requirements of people in society is neither inherently Stalinist nor inherently socialist. But it is clearly something which in post-capitalist society will have to be carried out in the interests of everyone . There are exceptional problems in Pashukanis's overwhelming, almost tenacious commitment to the withering of law .[2] Above all he failed to come to grips with the serious theoretical problems of the concept of a society not controlled by laws . But there was nothing that was of more concern to him than this concept when he wrote The General Theory, when he attempted the genuine defences of it (until about 1930) and possibly even in his later more abject apologies to the Stalinist machine. Peter Binns's argument is that Pashukanis's work is a reactionary `pipe dream' ; it played into the hands of Stalin .[3] Whilst Pashukanis on a personal level was clearly something of an authoritarian,[ 4 ] his theory can be seen as totally opposed to Stalinism . As Binns explains, Stalin had to eliminate Pashukanis . Stalin did this for sound reasons. Pashukanis had constructed a theory which was far removed from Stalin's build-up of an authoritarian state structure . From 1930 onwards Pashukanis re-

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canted and dropped parts of his theory wholesale . His final recantations published just before his disappearance are almost unreadable repetitions of Stalinist dogma . Yet Pashukanis was still eliminated because it was impossible for him totally to deny his major premise . The General Theory proclaimed loud and clear that there is no such thing as proletarian law and that the law of the Soviet State was simply a form of bourgeois law frozen into immobility . In 1929 Pashukanis wrote : `The problem of the withering of law is the cornerstone by which we measure the degree of proximity of a jurist to Marxism' .[5] A theoretician with such a commitment could have no place as a leading figure (if not the leading figure) in the jurisprudence of the worst years of Stalinism . Pashukanis was replaced because his opposition to Stalinism was at least as fundamental as any of the theoretical positions taken by the Trotskyists .[6] To claim that the technical apsects of Pashukanis's theory all too plainly, `cut with the grain of Stalinism . . .' (p . 111) is remarkable. A closely related problem, something picked up by Pashukanis's critics as early as the 1920s, is that Pashukanis almost totally excluded force from legal relations. By basing his approach on the voluntary uncoerced exchange of equivalents, Pashukanis produced a theory that failed to take account of the coercive nature of any legal system . Pashukanis had over-reacted to previously existing theories of law as merely force, and the critiques of Pashukanis on this point were fairly obvious . But it seems somewhat strange for Binns to suggest that a theory which analyses even bourgeois law in terms of non-coercion could be appropriate for one of the most coercive systems ever known . As is evident, my reading of Pashukanis is so fundamentally different from that offered by Peter Binns that I could not do justice to either Pashukanis's or Binns's argument in the space of this brief note . However, I could perhaps suggest that in addition to the above the following points made by Binns are at least contentious : 1 . Binns says that Pashukanis's concentration on technology (i.e . planning) meant the elimination of discussion ; whereas in socialism, according to Binns, (pp . 110-111) there will be more conflict not less. Socialism according to Binns will foster and nurture the articulation of conflicts other than those of class. It ought to be considered whether Binns is here guilty of the same mistake that he levels against Pashukanis in relation to technology, i .e . a sort of trans-historicism . The talk of increased conflict in socialism is, I suggest misleading . Socialism will articulate the potential for solving problems . However to equate problems with conflicts is to turn an aspect of capitalism into a feature of socialism . Nor I suggest does Pashukanis's General Theory encourage a view that discussions will be closed when socialism (communism) has been achieved . 2. Peter Binns says Pashukanis *is not sufficiently concrete and that his theory suffers from being to abstract . All theories of course are abstract. But given that, Pashukanis was totally con-

1 04

CAPITAL & CLASS 12 cerned with `reality' and `the concrete' . He kept comparing his work with that of bourgeois and quasi-Marxist theorists, arguing that his theory explained `reality' whilst theirs did not . Pashukanis was obsessively concerned with the production of a theory that was `sociological' i .e . that accounted for the actual nature of legal systems . He said the 'ought-is' dominated positivistic tradition of his time was concerned only with tracing one rule from another thus ignoring what he called `the facts of reality, that is of social life . . .' On the other hand, he thought his own theory dealt with the `facts', to which he would refer to support his argument . Pashukanis's failure was that he blissfully assumed that `reality' or the `facts' were unproblematic concepts . He made no attempt to question what was meant by reality and therefore failed to analyse the nature of 1917 itself or the post-1917 development properly . But it is almost impossible to argue that the `reality' of capitalist society `in general', i .e . a reality similar to that which Marx attempted to analyse, did not concern Pashukanis . Readings of Pashukanis's works other than The General Theory amply support this view . What has to be asked of course is whether Pashukanis did succeed in his object, i .e . the explanation of the failures of bourgeois theories of law to explain `reality', and whether his own attempts were any more successful. 3 . It is in medieval society according to Binns, `that his theory is most illuminating' (p . 103) . Likewise, Binns claims that Pashukanis correctly argued from his theory as to categorisations of pre-capitalist theories of punishment . I would suggest that Pashukanis's theory is totally unhistorical and that his categorisation of feudal law (and of the equivalence theory of punishment) is one of the most striking failures of his thesis . Whilst one has to be very careful with Pashukanis's recantations,[7] there is to my mind little doubt that Pashukanis genuinely realised that the categorisations of pre-capitalist law to which his commodity theory led were hopelessly inaccurate . What Pashukanis actually declares in The General Theory is that pre-capitalist law was not law at all. This gives his theory a spurious rigour, but is of course historically and theoretically untenable . 4 . Peter Binns argues that Pashukanis makes law part of the `base' of society, and not part of the superstructure where it is traditionally placed by Marxist theories . Without discussing the failures of Marx's base/superstructure metaphor, [8] I suggest that this is also a misleading interpretation of Pashukanis . One of the fundamental defects in Pashukanis's theory is his failure to deal with the `base' . Pashukanis concerned himself with the circulation of commodities only, and, as an `orthodox' Marxist who took a somewhat simplistic view of Marx's inadequate base/ superstructure metaphor, he did not consider that commodities had anything to do with the base . The thrust of Pashukanis's work, it has been generally agreed, was the close relation or homology[9] between the commodity form and the legal form .

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But Pashukanis approached commodities without asking how commodities were produced . Indeed Binns points out that Pashukanis does not draw the distinction between simple precapitalist commodity production and complex commodity production . This results in a total misreading by Pashukanis of the laws of commodity production as applied to capitalism (i .e . it is unhistoric) But one of the chief failures is the elimination of the production process from his theoretical system altogether. Pashukanis's failure to consider problems of production in relation to legal theory was one of his theory's major defects.[10] The law for Pashukanis is merely a product of the base, which is not to say, as Peter Binns does, that it `is part of the base of society' (p . 104) . 5. Most bourgeois jurists divide law into `public' and `private' . 'Pashukanis accepts this division' (p . 101) says Binns ; again a most arguable suggestion . What Pashukanis actually says is that the bourgeois distinction is unhistorical . The concept of public law for Pashukanis has to be developed through `its workings' (back to `reality' again, I am afraid) . In doing so, says Pashukanis, it returns to private law . Pashukanis actually collapses the distinction public/private, since he says all laws are the product of commodity exchange, and that so-called public law is merely a branch of private law . Public law, `attempts to define itself as the antithesis of private law, to which it returns, however, as to its centre of gravity' . [ 11 ] Pashukanis's work is of great interest and I am far from saying that Peter Binns's review is without merit .[12] In particular Binns raises the important question of Pashukanis's utter misreading of Capital and the consequent misuse by Pashukanis of Marx's notion of fetishism . However, the real worth of Pashukanis, i.e . his fanatical commitment to working towards a non-legal social order, has been lost completely in Binns's review, and the very strong criticisms that need to be made against Pashukanis are not properly raised . FOOTNOTES

1 2 3

4

See Capital and Class 10 (Spring 1980, p . 100 . All page references are to this article unless otherwise stated . His attempt was so strong he even slipped his thesis of withering away into some of his infamous recantations, on which see below. Pashukanis's work did to an extent do so, but not for the reasons suggested by Binns . See Beirne and Sharlet's introduction to Pashukanis : Selected Writings on Marxism and Law, New York : Academic Press (1980), and Sharlet, 'Stalinism and Soviet Legal Culture', in R . Tucker (ed .), Stalinism : Essays in Historical Interpretation, New York : W . W . Norton & Co . (1977) . These papers give a more considered approach to the problems of the result of Pashukanis's theory and his liquidation . See Hazard, in Beirne and Sharlet, op . cit. In a brief discussion I had with Professor Hazard after a paper he gave in London (Summer 1979), Hazard was most concerned to

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CAPITAL & CLASS 12 stress that on a personal level Pashukanis was a petty tyrant! See Beirne and Sharlet, op . cit., p . 268, and also Dobrin, `Soviet Jurisprudence and Socialism', Law Quarterly Review„ Vol . 52 (1936), p . 402 . 6 Incidentally, it would be a mistake to link Pashukanis with Trotsky inspired opposition . The evidence as to Pashukanis's i position is at the best equivocal . 7 See Beirne and Sharlet, op. cit. 8 For an introductory discussion of the metaphor in relation to modern Marxist theories of law, see D . Sugarman, 'Theory ; and Practice in Law and History : a prologue to the study of i the relationship between law and economy from a sociohistorical perspective' in A . Hunt (ed .), Law, State and I Society, London : Croom Helm (1980) . 9 See I . Balbus, 'Commodity Form and Legal Form : an Essay i on the Relative Autonomy of the Law', Law and Society i Review, Vol . 2 (1977), p. 571 . 10 See B . Fine, 'Law and Class', and S. Picciotto, 'The Theory i of the State Class Struggle and the Rule of Law', in B . Fine et al . (eds.), Capitalism and the Rule of Law, London : Hutchinson (1979) . 11 See Pashukanis : General Theory of Law and Marxism, London : Ink Links (1978), p . 106 . 12 I should stress though that I have by no means exhausted the contentious points in this brief response . 5

Debate

RESPONSE TO BINNS ON 'MARXISM AND MATERIALISM' David-Hillel Ruben Peter Binns' review of my book, Marxism and Materialism, misses or misrepresents what I regard as the centrally important theses of the book . I would like to restate these theses, not because I consider them to be impervious to criticism, but because any discussion of them must begin with their fair and adequate statement . I am perhaps immodest enough to think that a, discussion of those views by people on the Left is worthwhile, because I think that philosophical positions connect, albeit in a highly indirect and mediated manner, with questions of political pratice . I still wish to argue as I did in the book that there is a connection between the idealist views which I attacked and a `voluntarist' political practice . Certainly the connection between positivism, as it was expressed in much of the Marxism of the Second International, and political passivity has often been remarked . Thus, in so far as the book attempted to uncover a philosophical theory explicit or implicit in Marx that was neither positivistic or idealist, its usefulness might be in the way in which it could underpin an authentic Marxist political practice . I am under no illusion that I am capable of saying much more about that connection than I have already said, but I had hoped that discussions on the Left might find the book a catalyst for treating those sorts of issues . In this way, my book, in spite perhaps of the academic tone and style in which it is written, is far more political than Binns' review, which makes the discussion appear as only an academic philosophical debate and not also a debate with some political consequences . It is true, as I said several times, that those theses which I was discussing might be seen, especially by contemporary Marxists as trivial . The two theses in question are these : 1 The natural world is essentially independent of thought or mind . 2 Thought or mind is not essentially independent of the natural world (Binns calls this theses the `primacy' thesis) . To begin with, Binns says that I conflate the two theses . Patently, I do not . I state the first thesis in Chapter I (although I later amend its formulation in Chapter III), whereas the second thesis is only discussed in Chapter IV, from which Binns' citation is taken . The two theses are independent of one another, but my claim was that Marx held both . It is quite bizarre to assert, as Binns does, that on my understanding of materialism-the two theses-Berkely would have been a materialist . Since Berkely thought that the objective world was dependent on God's mind, he could not have held (1) . What I think has misled Binns is quite

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CAPITAL & CLASS 12 simply a failure to appreciate the actual dialectic of my argument . Aside from a fine distinction that arises in my interpretation of Kant and with which I shall not now bore the reader, (1) is my preliminary formulation of the first materialist thesis . When I subsequently reformulate the first thesis in Chapter III, in terms of the essential independence of the natural world from human practice, it is from the standpoint of a Marx who had already rejected the specifically Hegelian form of idealism, and the theology which it involved . [It is this reformulation of the first thesis that Binns quotes.] Reformulating the thesis in this new way serves a useful function, for it allows us to bring into sharper focus the varieties of idealism which we are actually liable to confront and some of which have found their way into Marxism . No-one today argues like Berkely that the natural world is essentially dependent on the mind of God, but many on the Left have actually argued idealism in this more modern form, that the natural world is essentially dependent on human praxis . It is especially galling to be told by Binns that thesis (1) is trivial, galling for at least two reasons . First, it was not trivial for Marx, since it had been denied by the post-Kantian German idealists against whom he reacted . My strategy throughout the book was to try to grasp how Marx understood materialism by tracing through some ontological questions in the writings of Hegel and Kant, and to give substance to Marx's materialism primarily as a rejection of their views . Second, I would argue that many on the Left reject the thesis that Binns regards as trivially true, not in its classical formulation, (1), but in the more contemporary `praxis' formulation mentioned earlier . This leads me to the second reason for which I find it odd that Binns calls thesis (1) trivial . I read Binns as having rejected it, in its modern form, and say so, at least by implication, in a footnote on p .94 . The reader can judge for himself to what extent Binns' views on truth, which I there discuss, are consistent with materialism . I claim that they are not, and a reply to this point by Binns would have been welcome. Throughout the review, Binns mentioned my arguments in favour of materialism, and wonders why I spend so much time arguing in favour of a trivial thesis . In fact, I produce no philosophical arguments at all for materialism, because it is my view that there are no arguments, either deductive or non-deductive, for the truth of materialism, that do not beg the very question at issue . I say this so often that I cannot understand how it escapes Binns' attention . I think that this result is attractive for us as Marxists, since it leads to a conception of human abilities of reasoning and thought that I call `naturalistic' and which I think is imminently compatible with Marx's conception of reason, and of the function of rational thought in the lives of men . Of this central doctrine of the book, there is not a word in Binns' review . Indeed, the main point of the book is not to argue for materialism, which as I have just said, I take to be an impossible task, but to argue for a connection between materialism and a



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certain theory of knowledge-a refined version of Lenin's reflection theory . I was aware that this would be controversial, again in part for political reasons, but Binns' review does not even mention, let alone argue against, what must be regarded as a central theme of the book . Nor is there a single statement in the review against this theory of knowledge-it is merely dismissed, quite without argument, by a few contemptuous phrases ('Lenin's worst philosophical aberration') . Binns believes that my conception of philosophy is 'hopelessly confused' . Whether right or wrong, I produce a single, consistent doctrine about this, but it has complications which I discuss, and Binns sees inconsistencies where there are any complications . My view is that legitimate philosophy must be a-posteriori in character-principally because I think that the idea of there being any a-priori knowledge presupposes an impossible view about human knowledge and its scope-and I suggest nothing to the contrary in the book . When Marx and Engels make remarks critical of philosophy, I like to think they are thinking only of a philosophy dominated by the illusion of the possibility of a kind of knowledge independent of all experience . Now, although I think that legitimate philosophy is a `general summing up of experience'-in this way, for example, it could treat standard philosophical ideas such as innate ideas, theories of reference and meaning, universals, perception-I do not think that, on the one issue of materialism v. idealism, the former can be established in this direct way by generalising scientific results . I can then describe a looser sense in which materialism is 'continuous' with science, and idealism is not (pp . 107-09, pp . 189-93) . I think that this position, which is certainly consistent, effectively disposes of Binns' accusations of inconsistency, and his attempt to discover four different views on the nature of philosophy in my book, all of which he regards as incorrect! Binns' review is vitiated by a number of fundamental philosophical errors . He implies, for example, on p . 134 that a study of essences must be a-priori . This claim is without foundation, as an acquaintance with the writings of Aristotle or Locke would show . Another example is Binns' confusion over the meaning of dualism . Binns says that I am a dualist . This is a mistake, as a casual inspection of the two theses I advance will bear witness . In the only,,ense of dualism concerning mind and body of which I am aware, a necessary condition for a theses concerning the relation of mind and body to be dualist is that it must be held possible for each to exist without the other . I take great rains, in the primacy thesis, to deny that mind could exist without matter, and actually assert that I am not a dualist (p . 73) for this reason . It is true that I am not a reductionist either, not because it is unfashionable to be one, as Binns insinuates, but because I think that reductionism is false and because it is rejected fairly explicitly by Marx . My view is that Marxism avoids being reductionist or dualist . Binns seems to believe that this alternative, between dualism and reductionism, exhausts the significant

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CAPITAL & CLASS 12 choices . It does not, and I hold neither position . Binns himself rejects the primacy thesis in his review . I am not sure if he understands the content I give to the idea of primacy, but if he seriously rejects what I have numbered as the second thesis, I think it would be Binns who was the dualist . Finally I should like to say something about the tone of the review . A certain perversion of Marxist method, a caricature of the polemical style of Marx, Engels and Lenin, often creeps in when comrades debate philosophy . The method is called 'impugning the credentials of your opponent' . Instead of feeling the need to produce either analysis or arguments, one only has to suggest that the opponent's views are `a form of methodological idealism that can only lead to bankrupt metaphysical essentialism' (p . 135), or that the opponent `fails to raise himself above the level of the 18the century materialism' (p . 136), or adopts `the Lockean position of seeing philosophy as science's underlabourer' (in fact I do not), a position so obviously false that having called it 'Lockean' makes it a view unnecessary to comment on further' (p . 137) . Coupled with the suggestion that one's opponent `does not take himself seriously' (p . 137), the opponent ought finally to wither, having felt the wrath of that philosophical purity achieved by the proper affixing of labels to everything .

Review Article CAPITALISM, CONFLICT AND INFLATION : ESSAYS IN POLITICAL ECONOMY, By Bob Rowthorn, Lawrence and Wishart, London 1980, 274pp ., £8.50 Hardback. A Review Article by Mike Williams A question always arises as to the point of a collection such as this, of essays all except two of which have been published previously in the period 1971-1977 . In this case, apart from the fact that some of them have been revised since their original publication, the main justification must lie in the status of many of them as seminal papers on issues still of major concern to Marxist theory, and which are the subject of continuing controversy not least within the CSE . Many of these essays have set the terms of debate which is still going on . Further, reading them as a whole it is possible to discern certain common themes which enable one to draw out the implications and problems of Bob Rowthorn's own theoretical insights . This process is undoubtedly aided by his ability to express complicated abstract arguments in a clear and accessible way, and to find just the right empirical data to support them . An overall concern seems to be to take seriously, and to critically build on the insights of some parts of bourgeois economics, specifically by imposing upon them the need to incorporate the roles of power and conflict deriving from antagonistic class-structure into any explanation of aspects of contemporary capitalist society . The significance and difficulties of this kind of synthesis will form the basis of this review . Common themes and common problems can be found running through many of these essays : 2, 3 and 4 all deal with the need to sever Britain's links with the world capitalist economy in order to implement socialist economic policies . And all three share a common weakness in underestimating the contradictions of attempting to implement social planning of some sectors of production, in an economy dominated by commodity production, and embedded within a world capitalist system .

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CAPITAL & CLASS 12 The second essay ('Imperialism in the Seventies-Unity or Rivalry?', New Left Review, September-October 1971), provides an example of Rowthorn's attempt to integrate class-conflict with fairly orthodox economic analysis . By comparing and contrasting three alternative perspectives on imperialism-US superimperialism (Sweezy and Magdoff), Ultra-imperialism (Varga), and imperialist rivalry (Kidron and Mandel), the author attempts to predict the outcome of the effects of certain economic and political trends on imperialist unity, and on the degrees of autonomy enjoyed by nation states to pursue economic policies in accordance with the interests of their national capitals . He argues against the implication of the first two approaches that the north/south contradiction is more fundamental for understanding the world capitalist economy than class antagonisms, predicting that inter-imperialist rivalry may contribute to a world recession which will exacerbate class-conflict in the capitalist states . Rowthorn presents empirical data to support his contentions that : (i) the relative strength of US capital has been overestimated . (ii) processes of concentration, assisted by multinational political bodies such as the EEC will further lessen the size advantages of US capital ; (iii) US technology will gradually diffuse to other imperialist powers, at much less cost and risk than that borne by the US originators ; (iv) Europe and Japan were growing much faster than the US in the 1950s and 1960s, (v) much US overseas direct investment has been defensive of market shares, as opposed to the offensive market penetration which has characterised that of other imperialist powers ; (vi) this offensive strategy has begun to include direct investment by these powers in the US itself, accompanied by tendencies towards the equalisation of wage costs between the imperialist states, and the exhaustion of non-US outlets for direct overseas investment . He concludes from this evidence that the outlook is for increasing inter-imperialist rivalry, though he disputes Mandel's argument that non-US capital will have massive cost advantages over US capital-on the grounds that these will be eroded by wage increases which at least match increases in productivity, with the consequent price increases and/or exchange rate adjustments . This essay is a straightforward, empirically backed intervention in the debate, but one which is thin on theory and (consequently?) seems to underestimate the extent to which the prosperity of the advanced capitalist world, and thence the 'consent' of its working classes may depend on `unequal exchange' with the underdeveloped states . Essay three (Cambridge Political Economy Group Pamphlet, Britain's Economic Crisis, 1974 and Marxism Today, August 1974) builds on the conclusions of essay two . It argues the need for economic policies designed to break the hold of both Britain's multi-national capital, and Britain's status as a dependent economy within the world capitalist system, in order to . implement and carry through socialist economic measures in the interests of Britain's working class . This, it is argued, is not a

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chauvinist stance, since the implementation of such policies inevitably involves struggle against world capitalism, which can only be successful with international working class solidarity, and would inevitably involve withdrawal from imperialist military and political alliances . The clearly set-out strategy argument presented here, is somewhat undermined by a tendency to underestimate the problems of his piecemeal recommendations for the resolution of different aspects of crisis in the interests of the working class . These problems would have been more apparent had the argument been more soundly based in the theory of capitalist generalised commodity production in the world economy, which would have emphasised the contradictions inherent in attempts, however limited, to plan the production of social use values within a world system dominated by commodity production . In the absence of such a theoretical basis, it is difficult to envisage the actual political situation under which a government committed to such socialist policies might come to power . Essay four ('Late Capitalism', New Left Review, July-August 1976) continues the theme of `the world economy' . The central point in this criticism of Mandel is the latter's dependence on the tendency of the rate of profit to fall, derived from the increasing organic composition of capital, to explain `long waves' in capitalist accumulation . Rowthorn argues that there is evidence (in the form of data on average and incremental capital/output ratios) that increases in the technical composition of capital have been more than offset by value-changes . He goes on to argue that recent falls in profit rates are to be explained by distributional changes (empirically evidenced) caused by increases in the share of state expenditure in Gross Domestic Product, worsening of the terms of trade with primary producers and working class success in distributional struggles . Mandel's emphasis on sudden external shocks to explain crises leads to misleading political conclusions, neglecting the importance of incorporative modes of capitalist class struggle and over-emphasising the ability of inflation to resolve profitability crises . This coherent theoretical and empirical critique of Mandel raises virtually all the questions which are debated by theorists of the development of the current world capitalist crisis to this day . Essays 5 and 6 address the problem of incorporating class conflict into the explanation of inflation in contemporary capitalist economies . And both neglect other (relevant) aspects of class-struggle than that over distribution . Essays 5, 6 and 7 are all concerned in different ways with money . Here there seems to be a crucial ambivalence as to the appropriate concept of money for understanding contemporary capitalism, specifically the determination of prices and the explanation of inflation . 5, 6, 7 and 8 are all concerned with the value of labour power and the determination of wages, and all suffer, to a lesser or greater extent, from the neglect of other than commodity inputs into the reproduction of labour power . 5, 6, 7, 8 and 9 all have something to

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CAPITAL & CLASS 12 contribute to an understanding of the increasing role of the state in the resolution of crises of capitalist accumulation, and specifically in the reproduction of labour power . And again all underestimate the contradictions of the transitional supercession of the commodity form . Essay five ('Inflation and Crisis', Marxism Today, November 1977) argues that a major cause of inflation in Britain today is the state's attempt to promote accumulation in the face of declining profitability, by expansionary monetary and fiscal policies, and that without a 'supply-side' response deflationary cuts in state expenditure eventually become inevitable . Most of the argument is clear but well-known, though with an interesting discussion of Marx on the determination of wages . Given the affects of wages struggle on profitability and accumulation, Rowthorn argues that such struggles must be integrated into a coherent `alternative economic strategy', which attempts to tackle the underlying problems of capitalist crisis in a way in keeping with the interests of workers and a strategy for socialism . Perhaps inevitably in such a simple and accessible account, certain crucial problems are glossed over . The significance of `intermediate goods' is neglected-inflation as a resolution of profitability crises, even in the short term, is going to be considerably undermined to the extent that manufactured inputs (intermediate goods) are also increasing in price, thence increasing costs . In my view it is also unfortunate to base any analysis of modern capitalism on a `commodity' concept of money : The value of gold is essentially irrelevant . The proximate constraint on inflationary solutions is the state's control of the money supply, whilst the underlying constraint is the extent to which money forced into circulation by inflationary finance is validated by the expenditure of socially necessary labour : That is (as cogently argued by `monetarists') inflation will get out of hand if there is not a successful supply-side response to inflationary expansion . (This point is returned to below .) Finally, once again Rowthorn fails to grasp the nettle of the inherent limitations to any project of superceeding the commodity form-for example, by extension of state production of outputs not marketed as commodities-whilst the law of value is still enforced by domestic and international competition . The result is that he seems overly optimistic about what can be achieved by a well organised and strong working class in terms of developing transitional organisations of production and exchange . This optimism is re-inforced by a neglect of the class-basis of capitalist structures of power, leading to neglect of the constraints which would be operating on any `left-labour' government which came to power by constitutional means . Given the capitalist response to successful wage struggling in the past-viz . a shift away from `productive' investment, into speculative investment in property, commodities etc ., one cannot be too sanguine about the dynamic modernising and restructuring effects of a



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wages offensive, even within the context of any `alternative economic strategy' which is politically possible under existing conditions . Essay six ('Conflict, Inflation and Money', Cambridge Journal of Economics, No . 1, 1977) sets out a model of inflation incorporating the fact that market forces constrain the ability of both Trade Unions and firms to hold or to increase their distributional shares . He argues that whilst these forces can be made to bite sooner by restrictive monetary policies, this neglects the underlying problem of lack of supply-side response to reflationary measures . This paper provides the clearest example of Rowthorn's project of integrating power and conflict with more orthodox economic analysis-it also brings out clearly some of the problems inherent in such an approach . Its strength is that it considers seriously the insights that can be gained into the workings of capitalism from bourgeois economic theory . It is of importance to socialists to understand whether `monetarist' policies can provide a (capitalist) resolution of the crisis, as a prerequisite for theorising alternative strategies in the interests of the working class . Rowthorn attempts to distance himself from `monetarist' theories by (i) a distinction between `expected' and `anticipated' (i .e . those expectations successfully incorporated into wage settlements) inflation, (ii) including the constraints of market power in the labour market ; (iii) analysing the effects of the extent to which changes in tax and import cost burdens are anticipated, (iv) an attempt to explain the coincidence of high unemployment and high inflation, (v) a claim to have rejected neo-classical individualism . However his model is formally very similar, without acknowledgement, to orthodox analyses of the `expectations augmented' Phillips curve with fully `anticipated' inflation, implying a vertical Phillips curve at the `natural rate' of unemployment . Further, the only variables by which he attempts to incorporate class power into the analysis are indices of the state of demand and supply in labour and product markets . This means that at best only distributional aspects of class struggle are modelled, and at worst it implies that the model does not transcend neo-classical individualism, but merely attempts to be more `realistic' by modelling the effects of widespread market `imperfections' . Once more within this formal economic model, as with essay five, only the cost effects of inflation of imported input prices and wage costs are modelled . neglecting the effects of inflated costs of (nonimported) intermediate goods . Essay seven (Marx's Theory of Wages, previously unpublished), attempts to gather together and integrate Marx's fragmented writings on wages, and to point up his debt to certain classical economists, particularly Ricardo . Rowthorn argues that the `received wisdom' on Ricardo on wages exaggerates the role of rent in `stationary state' tendencies, and neglects his discussion of counteracting tendencies (productivity increases from technological innovation, and the opening up of virgin terri-

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CAPITAL & CLASS 12 tories), as well as wrongly ascribing to Ricardo the assumption that wages are fixed, and thence that working class struggle cannot improve the lot of workers . He then goes on to point out that, in his earlier writings (but after the 1844 Economic and Philosophical Manuscripts, which just reproduce a garbled version of Adam Smith's theory of wages) Marx adopts and builds on Ricardo's distinction between market and natural wages (price of labour), in which the natural wage provides a (socially and historically specific) subsistence level, below which labour will not be regularly supplied, and the market wage responds to the demand for labour determined by the course of accumulation and the adoption of labour-saving technical progress. Even in these early writings Marx goes beyond Ricardo in firmly rejecting any `natural' constraints on accumulation, by emphasising the unlimited possibilities for technical progress, and by rejecting the notion of inherently declining returns in agriculture . Further he emphasises the social nature of the problems of capitalist accumulation : `technological' unemplyment increasing at a rate which overall accumulation cannot absorb, de-skilling and alienation, the role of competition from `lower natilral wage' workers from outside the capitalist mode of production, and the commodification of all consumption-all of which together constitute an absolute process of pauperisation of the working classes . Similarly Marx modifies Ricardo's reliance on the 'Malthusian population principle', on the grounds that adjustment lags, and the predominance of the social forces enunciated above reduce the effects of `natural' constraints on labour supply . Rowthorn then goes on to argue that in his later writings Marx needed to elaborate further to justify his use of the `costs of reproduction' of labour as a `natural wage' . He claims that whilst Marx himself is unclear and fragmented on this question, it is possible to construct a coherent theory of wages consistent with Marx,'st method and the materialist conception of history, by elaborating on the nature of `demographic forces', the needs of advancgd capitalism for a healthy, skilled and `consenting' work fore!, and the effects of trade unions on the supply of labour . Most 4 f the third section of this paper is taken up with a discussion of he alleged ambiguities in Marx's later writings, where the `value of labour power' is variously characterised as : the quantity 4f labour required to produce an historically and socially specific acceptable wage bundle ; that required to produce a wage bundle reflecting a `traditional standard of life' ; and the wage conceived as the labour-market-clearing price of labour power . Rowvthorn then goes on to analyse the impact on accumulation of increasingly effective demands for higher wages . This essentially 'implies that restricting wages in response to pressures on profitability has to be supplemented by other mechanisms such as imperialist expansion, cuts in state expenditure, intensification of labour . productivity increases and collective provision of those elements of the wage bundle for which this is a cheaper option .



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The final section attempts to go beyond Marx's own analysis by dropping the latter's assumptions of commodity money, given technology/constant returns to scale and uniform organic compositions of capital which ensured that prices would equal values, and thus be independent of the wage rate . This opens the way to incorporating class-based distributional struggle into the analysis as an important determinant of wages and prices . This last section thus underpins the approach taken in essay 6 . This long and rather rambling paper (essay 7) provides a resume of Ricardo's (well-known) theory of wages and a useful attempt to synthesise Marx's scattered writings on the subject . However there are a number of theoretical flaws and omissions in the way in which the latter is elaborated : Rowthorn neglects almost entirely those `costs of reproduction' of labour power not reflected in the wage form, from `domestic labour' to the `social wage' . He also labours over-hard to find contradictions in Marx's writings on wages. It would seem to be possible and more fruitful to view the apparently different characterisations of the value of labour power as different aspects of the determination of wages, which are insufficiently synthesised by Marx into a coherent whole . Indeed as Rowthorn himself seems later to argue, which set of determinants of the wage dominate is historically specific, and thus susceptible to materialist analysis . Similarly the author's attempt to find differences as between the wage theory in Capital, and that in Wages, Price and Profits seems somewhat strained : can any very strong thesis be built on the difference in meaning between wages `exclusively regulated by' and `depending on' the forces of supply and demand (p . 215), especially in the context of the acceptance of the distinction between natural and market price of labour (power)? There may be a difference of emphasis, based on the different importance given to distributional struggle in the latter work vis-a-vis the emphasis on struggle at the point of production over conditions and length of work, technical innovation and so on, but any adequate theory of wages must encompass both these forms of struggle . In general the value of this essay is diluted by its rather disjointed and unnecessarily repetitive presentation of some wellknown aspects of Ricardo and Marx's work . Consequently there are no significant conclusions, and the author has failed to demonstrate inconsistency, as opposed to fragmentation and incompleteness in Marx's mature writings on wages . To return to the theory of `commodity' money, deployed in essays 5, 6 and 7 : in my opinion advanced capitalism has more or less transcended the possibility of commodity money (gold) imposing an even semi-automatic discipline of the course of accumulation . This function of money has been increasingly mediated by the evolution of sophisticated financial institutions, and the adoption by states of measures and responsibility for controlling the exchange value of currencies (internally and externally) . If this is the case, then modern inflation is more adequately theo-

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rised as a disjunction, not between the value of commodities and the value of money (gold), but rather between total price and total value . Thus, building on Marx's work on fictitious capital etc . i n Vol . I of Capital, inflation may be understood as the overextension of `credit', including over-supply of currency to finance state expenditure, which is not subsequently validated by the expenditure of socially necessary labour . This approach would also help us to come to grips with the emphasis of recent bourgeois macro-economics on the problems of a lack of 'supply-side' responses to expansionary monetary and fiscal policies, and with attempted explanations of this lack of response . Essay nine (Rosa Luxemburg and the Political Economy of Militarism, previously unpublished) argues that it is wrong to attempt to view Luxemburg's writings on the effects of military expenditure on accumulation as an (invalid) underconsumptionist approach, and further that it is invalid to view these effects as being based on an increase in the rate of exploitation . Notwithstanding the ambivalence of the textual evidence, Rowthorn points out, neither of these approaches can be made coherent within Luxemburg's theory, whilst there are contained in her writings elements of a coherent and richer theory of the effects of military expenditure on accumulation, via the stimulation of technical innovation, the drawing of non-capitalist sectors into commodity production, the shifting of the composition of consumption in favour of manufactured commodities, the securing of markets for leading sectors of the capitalist economy and the diffusing of working class wage militancy by appealing to chauvinistic sentiments . Whilst this paper contains a convincing refutation of the two normal interpretations of Rosa Luxemburg's writings on military expenditure, it is rather oddly organised in that, having destroyed the logic of her own arguments, it then supports some of her conclusions on diffuse and rather contingent grounds, which have but scanty support in her own work . Essays 8 and 1 have been kept to last, and will be dealt with together, because not only are they the most theoretical, but they illustrate, respectively, the least and the most conceptually adequate aspects of Rowthorn's approach to political economy . Both are well-known, and have been subjected to intensive criticism, so only the main elements, and those most relevant to this review, will be summarised here . Essay eight ('Skilled Labour in the Marxist System', Bulletin of the Conference of Socialist Economists 1973) is perhaps the least useful paper in this collection . It sets out a model for reducing skilled to simple labour, by reducing it to the dated simple labour times needed to produce the former, and shows how this can be incorporated into a (Post-Sraffian) model of production . The project of this paper seems to be entirely misconceived or at best redundant, and the argument fundamentally flawed : the mathematical model is redundant, and could be replaced by the assertion that differentially skilled labours can be incorpora-

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ted into a Post-Sraffian model and, if required, reduced to `dated labour' inputs in precisely the same way as other commodity inputs. The project is misconceived if the conclusion of recent work on value theory, that specific ('concrete') labours are, and can only become, commensurable (as abstract labour) in the exchange of their outputs as commodities in a system of generalised commodity exchange, is accepted . Labour power is a `peculiar' commodity : whilst it enters exchange (is allocated) as if it were a commodity, it is not produced as a commodity . This tension shows up in several logical flaws in Rowthorn's argument : firstly, by what real mechanism can it be ensured that the `value creating' capacity of a particular skilled labour is proportional to its `dated labour' costs of production? This is problematised particularly since not all of the `inputs' into its `production' can be treated as commensurable commodities, since they are not exchanged in the market, and thence are not commensurated . To put it the other way round, the allocation of labour which is not expended on the production of a commodity is not constrained by the law of value, thus it does not make sense to treat it as `constant capital'-the objectification of the past labour (of the 'skill-producers') . But even ignoring this problem, it seems difficult to abstract from the problems caused for the Sraffa system by `joint production' (footnote 8), in an approach which deals with skill in a way exactly analogous to fixed capital (the most widespread example of `joint production) (section I) . In sections II and III the author deals with the (realistic) case in which skill production (various forms of education and training) is not performed by `productive' labour, but rather by state employers, who do not market skills as a commodity . But this completely invalidates the project of demonstrating how the `surplus labour' of such `teachers' (etc .) is realised as additional surplus-value for the capitalist employing the skilled labour . This is because such specific labours are not commensurable with value producing labour, precisely because their output does not enter the system of generalised commodity exchange by which different specific ('concrete') labours are commensurable as `abstract labour' . It should be noted that this is not a `practical' problem of difficulties of measurement, but a problem of theoretical incoherence . Thus in the `simple illustration' (section IV) it just does not make any sense to talk of adding surplus labour to surplus value, since the only real mode of commensuration of different labours is as value, quantifiable only as the exchange value of their products as commodities in a system of generalised commodity production, manifested as money price . It may well be that various `indirectly productive' labour performed under other than capitalist relations of production (in the 'non-commodity producing' sectors of state production, in the home and so on), `enhances' the productivity of waged labour. But this `enhancement' is not in principle quantifiable prior to the commensuration of the waged labour as abstract

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CAPITAL & CLASS 12 labour by the entry of its products into a system of generalised commodity exchange . There is no reason why, to revert to an earlier point, the degree of `enhancement' should be proportional to the expenditure of `dated labour' time in the production of skilled labour . This is perhaps the most blatant example of the pitfalls of attempting to cobble together bits of bourgeois economics with `Marxist theory' in this case the bourgeois theory of `Human capital' is perfectly internally coherent (whatever its failings as an explanatory abstraction) since commensurability is ensured from the start by the individualistic maximising behaviour of the agent who is assumed to rationally equate the marginal costs of undergoing skill training to the expected marginal benefits from acquiring that skill, but attempting to transpose the insights of this theory into a value theory context just doesn't work . The first essay ('Neo-Classicism, Neo-Ricardianism and Marxism', New Left Review, July-August 1974) is perhaps the best known . It is the original attempt to relate the work of Sraffa to both Neo-Classical and Marxist theory . Neo-classical economics is indicted as `vulgar economy'-the mere systematisation of appearances . But, more fundmentally, if it is taken seriously as an attempt at theoretical abstraction from the capitalist economy, then it is an inadequate abstraction, being subjectivist, individualist and naturalist : production is conceived asocially and ahistorically, and classes make but a shadowy appearance as the recipients of different income categories. Neo-Classical economics, it is argued, is ideologically supportive of capitalism-suggesting that the norm in free enterprise market systems is the smooth harmonisation of individual interests via the market, and any problems are but `imperfections' to be resolved by appropriate ad hoc policy measures, such as Keynesian macro-manipulations . It is further argued that it forms an epistemological obstacle to the analysis of laws of motion of the capitalist mode of production . Those aspects of neo-classical theory which did seem to have some explanatory power-the aggregate production function and one sector growth models-have been successfully undermined by the Sraffa-based `Cambridge capital critique', driving neo-classical theory into the sterile sophistications of general equilibrium theory . The section on Neo-Ricardianism contains the best and clearest statement of the confusions, amounting at times to intellectual bad faith, of the `Cambridge capital controversy', locating both its strengths and weaknesses . The Neo-Ricardian version of Marxist economics is indicted for not transcending the limitations of Sraffa's critique . Class-struggle makes a more substantial appearance here : specifically the Sraffa model generates multiple equilibria, raising the possibility of successful struggle to move to one more distributionally advantageous to the workingclass. But it is still limited to struggle over distribution, externally imposed on a technologically determined system of production, and thus neglects entirely the social relations of production .

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The section on Marx distances his theory from that of Ricardo in terms of the former's periodisation of history by the theory of modes of production, and distinctions between price and value, production and circulation, labour and labour power, and constant and variable capital . There is a particularly good and fresh sounding discussion of the origins of profits in surplus value, incorporating insights into the nature of class-struggles at the point of production over productivity and working conditions as well as over wages . This essay provides an invaluable, clear exposition of the specificity of Marxist vis-a-vis Neo-Classical and Neo-Ricardian theory, though it finishes rather abruptly, without drawing out all the implied conclusions of the analysis . One wonders then, why these theoretical insights seem so rarely to inform the other essays? There are some general problems with Rowthorn's work as a whole : the level of political/theoretical sophistication varies greatly, reflecting the original journals, and thence readers, for which the essays were written . More importantly, but much more difficult to substantiate, is an uneasy feeling that we are travelling well worn and obvious paths, using theoretical structures which are too simplistic . Further, having clearly raised the fundamental questions, the analysis then slides over the real difficulties without grasping the nettles of the fundamental contradictions which the taking of recent debates, particularly in Marxist value theory, more seriously might have pointed up . A corollary to this apparent evasion of the main contradictions, and perhaps also of a method which sometimes slips, notwithstanding his own critique of bourgeois and Neo-Ricardian economics in the first essay, into merely super-adding class conflict to bourgeois economic models, is that the political conclusions often seem over-optimistic as to what can be achieved (via the dialectic of reform and revolution) by socialist economic policies whilst the capitalist mode of production continues its dominance . However, this feeling may derive precisely from the fact that these essays are well-known, and have had a formative influence in the development of many socialist economists . It may be this, together with the clarity of exposition, which enables us to identify and problematise some of the contradictions raised : such simplification and elision may be the only way to overcome the intellectual stasis which comes over many Marxist theoreticians when faced with the need for concrete (theoretically informed and empirically supported) analysis of aspects of contemporary capitalism . It may well be that the impression that one is reading well known and sometimes rather long-winded expositions of positions which either are uncontroversial, or in which the points of controversy are smoothed over, is an inevitable concomitant of the clear exposition in accessible language of the arguments and conclusions of usually jargon-laden theories . Rowthorn's work, it seems to me, teeters perilously on the brink of eclecticism . Whilst I applaud his attempt to incorporate

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CAPITAL & CLASS 12 the insights of Neo-Classical and Neo-Ricardian theory into his analysis, the problems of eclecticism can only be avoided by doing this more critically-by locating the strengths and weaknesses of such bodies of knowledge : Neo-Classical theory provides a formal model of generalised commodity production in which most production is of commodities at a price which includes some normal rate of profit, but it is ideologically supportive of capitalism in suggesting that this is the uniquely rational way of allocating resources and directing the work process, and, concomitantly, inadequate in abstracting from essential features of capitalism specifically `economically' determined class antagonisms . Neo-Ricardian theory provides a systematic analysis of the way in which exchange ratios, and thence prices are conditioned by the available techniques of production as manifested in production coefficients, including an externally given wage bundle . But it is inadequate in abstracting from the mutual interaction between technology and social relations, and thence from the determinants of the course of class struggle, which appears external to the organisation of production, as a power struggle over distribution. These problems seem to stem from an ambivalence in these essays as to the status of value theory . Whilst it would be anachronistic and unfair to criticise them for not taking into account the insights of recent debates on value theory, Rowthorn doesn't even seem to have hoisted in the implications of his own analysis in Essay 1 . The result is that his political conclusions seem to underestimate the contradictions of partially superceeding the commodity form, to overemphasise the distributional aspects of class struggle and to fail to face up to the problem of the forms of co-ordination of worker controlled productive enterprises into a coherently planned system for the production of social use values. It may be that these problems are not unique to Rowthorn, but rather reflect the difficulties of moving from the high level of abstraction of value theory debates to concrete analysis of current events : after all such analysis has been carried out almost exclusively by analysis contemptuously dismissed as 'NeoRicardian' or `eclectic' by the high theorists of Marxism who, however, rarely seem to be able to deploy their theories in concrete, empirically supported analyses . The publication of these essays is to be welcomed as an attempt by one of the most easily understood Marxist economists to produce precisely such concrete analysis, appropriating the insights of other bodies of theory, and presenting it in a way which is both empirically informed and, in general, accessible to a wide audience . The collection will be particularly useful for those of us attempting to introduce economics students to the elements of Marxist political economy . Many of the issues raised become particularly relevant with the renaissance of 'neo-market' economics, derived from the alleged `efficiency' of market allocation of resources, and resulting in the adoption of `monetarist' economic policies by many capitalist states .



CLASS AUTONOMY AND THE CRISIS Review WORKING ITALIAN MARXIST TEXTS OF THE THEORY AND Article PRACTICE OF A CLASS MOVEMENT : 1964-79 Red Notes and CSE Books (London : 1979) £3.95

Reviewed by Bob Lumley Working Class Autonomy and the Crisis was put together by Red Notes and CSE Books as an act of solidarity with those imprisoned in Italy in April 1979, a cause celebre associated with the name of Toni Negri but involving hundreds of political militants active in the so-called `area of autonomy' . Some of the texts, such as `Capitalist Domination and Working Class Sabotage', have been used by the magistrates as `evidence' of active involvement in terrorism ('masterminding behind the scenes') . And the pieces describing and analysing the mass political movements of the past two decades speak of precisely those experiences that the contemporary Italian State and main political parties are trying to put on trial . Moreover, some of the interventions anticipate and provide insights into the radical restructuring of the State, and thus offer the means to understand the significance of the developments of which the April '79 arrests are a part. As a response that calls for the solidarity of all readers against political repression the book therefore operates at several levels . As the preface outlines, the aim is to introduce us to theoretical debates in Italy by translating material for the first time and thereby to provide a more theoretical continuation of the pamphlet Italy 1977-78 : Living with an Earthquake .[1] It is both a historical documentation and a challenge to re-think political problems facing us in Britain, these being fundamental to the creation of any substantial international solidarity . As the CSE Books preface says, our task is to help develop a real threat to capitalism in our own countries . The past work of the Red Notes collective, involving a continuous contact and exchange with Italian comrades, and CSE's own launching of the discuss_,-ions around the labour process [2] mean that many of the polit3,*, VOKo»E ical and theoretical developments have entered into our exper-'F~~Q uIABII E»~ `` ya ,t ience . The prospective publication of the People's News Service ~~ reports on Italy [a] and of Money and Proletarians, a collection of essays including Negri and Bologna, show that the initiative is not a flash in the pan but part of a continuing project . 1)I Before discussing the contents of Working Class Autonomy and the Crisis I'd like to comment on its format and presentation because I think them distinctive of Red Notes . It is altogether glossier (and, of course, more expensive) than the old (and related) Fact Folders, but retains some of their qualities, with a premium being put on the informative and the informal without being shoddy . Unlike a book that you can slip neatly on the

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CAPITAL & CLASS 12 shelf, it's a floppy A4 size and has therefore to be kept lying around . The lay-out makes it easy to look through and there are some beautiful cartoons, especially those of Gasparazzo, who made trouble for the bosses on the pages of Lotta Continua . He is really emblematic of a type of humorous working class creativity and wit that is singularly lacking from the dour tradition of intellectual workerists . Rather we find him in the stories of Franco Platania, who recollects how he used to take the mickey out of the foremen of FIAT by driving past them in his car, when they only had mopeds . The poster on the cover, however, which shows a group of Socialist Realist-style male workers driving a stake into the capitalist dragon and proclaiming : `The crisis of the bosses is a victory of the workers', is entirely in keeping with the

E' UNA VIT RIA DEGLI OPERAI!



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worst forms of Italian workerism . It is also in tune with some of Negri's apocalyptic absurdities in which `the proletariat' does indeed appear as a sort of St . George always ready for insurrection . I was going to suggest changing the cover for the next edition, but, on second thoughts, it would be more honest to keep it . Certainly there is plenty of self-criticism in the book, combined with an invitation to readers to help with the work of translating, to suggest texts and to criticise . The translation seems excellent . The translators took care to be precise, and to respect the properties of certain concepts in the Italian through literal translation ; the decision is justified not just in terms of accuracy, but of the need to develop a counter-language of class politics . Sometimes this tendency is self-defeating, however, and at one point 2 pages of the original are left out by the translators because of their sheer opacity . The accounts of workers' experiences as told by themselves are really sensitively and colloquially translated . In other aspects I think that Working Class Autonomy is open to a lot of criticism and suggestions, and the protocol for these is contained in a footnote at the end : `Looking back on our book, it is very unlike our earlier publications. It appears male, neo-Leninist and very 'Fiatist', as well as being hard to understand in parts' . A description of the contents : there are three sections . First, there are some of the key theoretical texts of the Autonomist tendencies : Mario Tronti's seminal `Lenin in England' and his `Strategy of Refusal', which belong to the 1964-65 period ; the 1973 Theses on the Capitalist Crisis by Potere Operaio ; Toni Negri's interventions of 1973-74 on the transformations of the State, the crisis and phases of the class struggle ; Sergio Bologna's `Tribe of Moles' of Spring 1977, an assessment of the post `68 Left and the party system, and, finally, Negri's `Domination and Sabotage' of September 1977 . Secondly, there is a dossier on the April '79 arrests, containing live reportage of the events by the PNS correspondent, analyses and calls for mobilisation by the international defence committees, and material smuggled out of the prisons . There is an interview with Toni Negri about his experience in prison (where he and the others still languish), that contains a penetrating Foucault-like analysis of the subjection to power as isolation and as the destruction of identity ('Your personality, what you have said and done, is discussed in minute detail and is reconstructed . . .to produce someone who you do not recognise') . Finally, there are first-hand accounts of struggles around FIAT stretching from the 'S0s to the present . Working Class Autonomy is introduced by a brief chronology that sets down in outline the development of theories of autonomy and of cycles of class struggles . Each section is interspersed by short interviews and extracts that make connections, and the main texts have prefaces, but the onus is heavily on the reader to do the work of making the connections, of struggling with sometimes intractable jargon and trying to relate the insights to her/his own field of politics . This seems to be deliberate, part

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CAPITAL & CLASS 12 of a policy of letting the texts speak for themselves ; there is a minimum of framing, contextualisation and critical assessment . Whilst this openness offers maximum scope for interpretation by the reader, I think it does call for hard work and some unpleasant up-hill climbs . More intervention by the editors to give coherence to the material would have been useful . Meanwhile I'll try to offer some contextualisation and critical comments . The story begins with the early '60s cycle of workers' struggles, especially those at FIAT, and with the work of the Quaderni Rossi ('Red Notes') collectives in re-thinking Marx .[51 It would be crudely reductionist to see the two processes as either parallel or equivalent discoveries of `working class autonomy', or as a unity of expression of its theory and practice . The theoretical advances have to be placed in relation to broader political and intellectual developments ; in the post '56 period Third Internationalist Marxism in its Stalinist version was in crisis . On the one hand, the Western capitalist economies were revealing remarkable capacities for accumulation in which the working classes were given a recognised role as wage-bargainers/consumers . Neo-capitalist ideologies of consumerism and planning claimed that the old class contradictions had been superceded . On the other hand, the Soviet model, for all its planning, had not overcome some of these contradictions, and even the PCI began to distance itself from Moscow, using Gramsci as an alternative source to rationalise a strategy of inter-class electoralism . Much of the work of the Quaderni Rossi represents a critique of Marxist orthodoxy, in the light of its incapacity to understand the contemporary reality of the `economic miracle', and through a return to Marx . Panzieri, who translated Volume II and the Grundrisse into Italian, was the formative guide for a whole generation of the intellectuals of workers' autonomy . His `Surplus Value and Planning' [6] was fundamentally important in taking apart a technicist-determinist usage of the concepts of forces and relations of production, giving the latter determinacy through the relation of struggle between capital and the working class . By an analysis of the chapters on the transition to machinofacture and on the struggle for the shortening of the working day, he showed how machinery was not neutral but an instrument of control in response to workers' insubordination . He showed that within the factory, and as a consequence of the dominance of the factory, in society as a whole, capitalist planning rather than the anarchy of the market was the intrinsic tendency of development . Panzieri thereby constructed the elements of an analysis able to deal with the Taylorist transformations that were a dynamic factor in the boom, and to open up a critique of market-oriented ideologies via a return to the `hidden abode of production' . He also pointed towards a critique of Marxist orthodoxy that located its deficiencies at a practical level in the Soviet formation itself ; `In Lenin there seems to be a lack of clarity regarding the possibility that capitalist social relations may be present in socialist planning . This lack of clarity would later facilitate the repetition of

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capitalist forms in the relations of production both at the factory level and at the level of overall social production-all this, behind the ideological smoke-screen of the identification of socialism with planning, and the possibility of socialism in one country only .'[ 7 ] The cycle of workers' struggles beginning in the late '50s, and massively generalised in the years 1960-63, rocked the paternalist and repressive system of industrial relations, and opened up new perspectives in independent and subversive workers' struggles. Yet there was no effective link between the Quaderni Rossi collectives and the factory militants of a practicalpolitical kind . The intellectuals had broken away from the PCI and PSI and were in search of a new politics ; the workers' strikes contained moments of independent rebellion outside the control of the unions such as the Piazza Statuto attack on a `yellow union' HQ, but this had a symbolic value and did not represent a conscious, alternative form of workers' action . Working Class Autonomy contains a participant's account of the events by Luciano Parlanti which concludes : `If you ask me, even if '62 ended in individualism, it also opened up new political perspectives for the workers-a perspective that developed, and finally expressed itself fully in 1969' . The interview with Franco Platania, who was more typical of the un-politicised discontent of that period, is more sceptical . It gives a fascinating picture of the forms of social control exercised by FIAT, in which he talks of country picnics with foremen as well as of his personal war with the company . His attention to detail, to the materiality of living, contrasts with the more triumphalist, idealised accounts, and I think the 'private'/personal accent indicates the way in which the political recomposition of the working class in the period was still gelatinous and vulnerable to management counter-attack . But if the link between the Quaderni Rossi intellectuals and the workers was tenuous, the project of Panzieri and the others was to learn from the struggles and create a network of cooperative work together . Significantly Panzieri transferred from Rome to Turin in 1959, and enquiry revolved around the big factories . Romano Alquati summarises their approach to political intervention : the aim was to start with the material conditions of the workers rather than with ideology, to learn from their actions, to re-interpret them, moving from the particular to the general, in order to make the workers' conceptions/actions adequate to the generalisation of capital . Panzieri had already laid some of the theoretical foundations for grasping the significance of class struggles in the factory as the motor and central contradiction of the system . For Alquati the new conception of the factory led to a reconsideration of the State : `If the problem of the State is behind the problem of power, it should not be confused with the parliamentary institutions, which today are losing their principal function of atomisation and political division . . .to the benefit of capitalist profit, in as far as the technologically advanced firm by now does so through the development of technology, through

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CAPITAL & CLASS 12 their internal bureaucracy, and through the functions of control, planning and organisation .'[ 8 ] Such an analysis entailed a re-evaluation of struggles that had previously been rated `economic', and especially an interest in forms of workers' insubordination . The old Third Internationalist formulae distinguishing `political' and `economic' struggles were discarded as inadequate to understanding the `planned capitalism' of the modern factory . Hence the structures of party and union, based on this division, were seen as external blocks to the realisation of forms of action and organisation expressive of working class material needs and aspirations to abolish waged labour . For the Quaderni Rossi collectives, therefore, the return to the factory was not a new form of populism, but part of a project for the refoundation of communist practice on material bases and within the new working class of the big factory . This simplified account necessarily presents a logic of development that appears like the unfolding of an idea, but, of course, the history is messy and disjointed . The Quaderni Rossi themselves contained a series of different viewpoints, and the collectives later dissolved into a multitude of different tendencies . What is often overlooked is the component that was active within the unions themselves ; for example, Vittorio Foa, whose article on class struggle and capitalism opened the first issue, was an official of the FIOM (engineering section of the CGIL) and a member of the PSI . The openness of this component to moves among the rank and file was one of the factors that enabled the Italian unions to `ride the tiger' of the Hot Autumn, and in the early stages to promote militancy in the factories . The more celebrated and inventive breakaway was represented by Mario Tronti, whose `Lenin in England' is considered a founding text of the Autonomy `tradition'. It is worth looking at his disagreements with Panzieri as a vantage point for some critical assessment.[91 The terms of the conflict between Panzieri and Tronti came to a dividing-of-the-ways over their differing analyses of the wave of workers' struggles. For Panzieri the separate signing of the 1962 engineering contract represented not a `betrayal' of the rank and file, but the logical outcome of a struggle which had not gone beyond the `horizon of trade unionism' . Although he saw contradictory and subversive elements in working class behaviour, for him they did not have sufficient coherence to make up a conscious project or to give rise to alternative forms of organisation . For Tronti, the cycle of struggles was still in the ascendant in 1963, and was inherently antagonistic to capital . For him, the struggles contained the `strategy' of the working class and its communist `refusal of work', and the political task was therefore to create `the party' to provide the `tactics' . Panzieri, on the other hand, pursued his earlier insistence on the need for collaborative research with workers to elaborate the elements of anti-capitalist behaviour and consciousness and root out the secrets of adequate forms of strategy and organisation from the daily material existence of the class . This required both a study of Marx, and workers' enquiries.

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On this basis, Panzieri criticised Tronti's `Lenin in England' : 'Tronti's piece . . .is for me a fascinating resume of a whole series of errors that the workers' Left can commit in this moment . It is fascinating because it is very Hegelian, in the original sense, as a new way of re-living a philosophy of history . It is precisely a philosophy of history of the working class . One speaks, for example, of the party, but in that context the concept of the party cannot be deduced or forced in ; one can only deduce the self-organisation of the class at the level of neo-capitalism . (As a Spanish anarcho-syndicalist said) what one deduces is that capitalism lives only by autosuggestion' .[ 10] The split too easily summarised in the Working Class Autonomy introduction as being between `researchers' and `activists', had deep theoretical bases and long-term political significance that should not be glossed over in the name of `fundamental' continuities. The statement that : `the autonomy slogan is thus coterminous throughout with the refusal of work slogan, providing the overall orientation towards a strategy of communism' is misleadingly anachronistic . Another commentator writes : `The refusal of work (which for Panzieri pointed only to the unwillingness of workers to participate actively in the control of development) was understood [by Tronti : BL] as the explicit willingness to engage in revolutionary praxis' . [11] Tronti, Alquati and the others who founded Classe Operaia, turned Marxist orthodoxy on its head . In `Lenin in England', `Factory and Society' and `The Strategy of Refusal' the distinction `class in itself' and `class for itself' (and all its signposts to investigating class consciousness) vanishes ; the Lukacian 'becoming' of revolutionary consciousness is made into the `being' of the working class, and history is abolished as an irrelevance ; society is sucked into the factory and all its struggles become automatically and `implicitly' communist . It is fascinating to read Tronti because he is uncompromising ; for example : `We too have worked with a concept that puts capitalist development first, and workers second ; this is a mistake . Now we have to turn the problem on its head . . .and start again from the beginning : and the beginning is the class struggle of the working class . At the level of socially developed capital, capitalist development follows hard behind the struggles . . .'[12] However, it is a theoretical and political regression . Whereas Panzieri had worked to transform concepts with humility and worked for tactical reasons within the institutions of the labour movement, Tronti inverted the Marxist orthodoxy to form a new ideologism . The complex relation of labour and capital that is both a relationship as labour-power sold within capitalist relations of production and as a class against that relation is unilateralised ; the working class conditions capitalist development, and not the reverse . The figure of the worker as a living being within specific situations and the notion of empirical enquiry disappeared into idealist philosophising . Already within the Quaderni Rossi work there was a tendency to focus exclusively on the factory, thereby narrowing the use of the concept of CC 12 1

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relations of production and not considering other moments in the circuit of capital . Tronti takes it to logical extremes . In practical political terms this theoretical project involved the idea of a working class `use' (as if from outside) of the Communist Party and trade unions. Tronti's trajectory from theorist of `class autonomy' to theorist of the `autonomy of the political', and his passage from a revolutionary sect into the PCI in 1971 has led to a bizarre situation ; Autonomists quote the old Tronti against the new, as if in a Hall of Mirrors . The Trontian episode was not passing, but becoming a politicotheoretical heritage of historical significance ; the problems of the oscillations between ultra-Leninism have appeared in numerous variants. One of the off-shoots of the Classe Operaia experience, Potere Operaio, is the group in which both Toni Negri and Sergio Bologna were leading lights ; these two represent two poles of the neo-Leninist and movementist currents of what came to be know generically as the `area of autonomy' . Before looking more closely at their texts, which date from 1973, I will outline some of the developments around the earlier '68 cycle of struggles . A couple of statements in the chronology of Working Class Autonomy need to be questioned . The first is that `the widespread interventions of Classe Operaia spread its influence throughout the growing extra-parliamentary Left, laying the groundwork of ideas and cadres for the worker-student movement in Italy from 1968' . The second is that `the students' offensive and the workers' Hot Autumn . . .opened the way to a political movement of Autonomy' . Classe Operaia (and subsequently Potere Operaio and Lotta Continua) undoubtedly played an important role in `anticipating' key demands ('Equal wage rises for all', `Grade 2 for all') and forms off struggle (wildcat strikes, non-cooperation) . This is a great tribute to the Panzieriari notion of Marxism as the interventionist `sociology of the working class' put into practice . However, many made the mistake of assuming an influence they did not possess . Ironically, Italian factory workers themselves invented or rediscovered `tactics' that enabled the realisation of a `political recomposition' adequate to the transformations of their `technical composition' as Taylorised proletariat . And they did so in the context of multiple `determinations' (from the fragmentation of the labour market and increased bargaining power, through to ideological and political shifts at a national and international level) . The limits of the groups' interventions quickly became apparent ; their demands for real wage increases as a means of unhinging the mechanisms of accumulation, their analysis of the strikes as the `refusal of work' and their consequent conception of the struggles as autonomous of capital and its institutions (parties, trade unions) entailed the living out of a `fantapolitica' ('a science fiction politics') . The political positions of Potere Operaio, Lotta Continua and the workerists were hastily revised, but generally on an opportunist basis that tended to make theory a means of rationalisation and apology . In the case of Lotta Continua, it was

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realised that the workerism of translating wage struggles across the social board (wages for students, for housework . . .) could not mobilise politically, so the struggles of workplace insubordination, instead, became the model for mobilisation against authority in the class-room and elsewhere . Then, within the factories, workers under the guidance of Lotta Continua began to come to terms with the unions, which had not been superceded, but had `ridden the tiger' and taken a new lease of life . Meanwhile, Potere Operaio, with more consistency and much less political `instinct', accepted a minority role . In terms of theoretical work their contribution has perhaps been greater . Apart from the writings of Negri and Bologna, there are important pieces by Dalla Costa and the Lotta Feminista Group of Padua, which were among the first to attempt a materialist analysis of women's exploitation and oppression .[13] (Working Class Autonomy could well have contained some of this work) . It could perhaps be argued that the failure of Potere Operaio to insert itself into the more general class movements made the appeal of a party-centred Leninism greater. The `autonomous' nature of the mass struggles themselves and their relationship to the proponents of 'Autonomia' thus make it dubious to talk about an opening into a `Political movement of Autonomia' . Negri's characterisations of the phases of struggles are little short of fictional ; he writes of the period '68 to mid '69 as marked by a `total and spontaneous relationship between the class movement and the vanguards', and goes on to speak of the 'Porto Marghera insurrection' (??) as a `possible model of urban guerrilla' .[141 A Trontian love of the movement of history as the movement of ideas, shorn of the dross of `detail', lives on . For a considered and critical account of the failings (and successes) of a generation of revolutionaries it is best to read Bologna's `Tribe of Moles' . Negri's continued vision of escalating struggles, each phase reaching higher levels of antagonism, projects a mythical past into a mythical future . It is dangerously tempting to dismiss Negri's writings, apart from anything else because of their impenetrable style, Some of his work has been tremendously valuable ; for example, his analysis of Keynesianism (which is due to be published soon in English) is a major contribution to understanding how `political economy' learnt from and responded to the Bolshevik Revolution .[15] Moreover, Negri is representative of a significant political current. The Negri of the '60s does not appear in this collection, and already in the 1973-74 theses he is responding to the development of social struggles (especially those over housing in Milan)'in the passage from the factory to society, the struggle over the wage becomes the struggle for appropriation, a decisive attack on the basic principle of bourgeois property, of the circulation of commodities, and an attack on realisation .'[16] The spread of these struggles in the 1974-75 years, the emergence of the women's movement and of a youth-cultural movement overtook

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CAPITAL & CLASS 12 the older generation of `leaders', who - were forced to follow in their wake when once they had been the `anticipators' and participants . The intellectuals of the Autonomist tendencies were sufficiently open not to be driven into total crisis like the more orthodox New Left, including Lotta Continua. Some of their less workerist elements were actually active in fomenting the movements.[17] Yet Negri and others were trying to over-extend a certain conceptual apparatus to analyse developments outside the factory . The ever inadequate conceptualisation of the factorysociety relationship, first schematised by Tronti, collapses . The categories are not there to make sense of social oppressions such as those organised through patriarchal relations . Negri tends to stick to Marx's concepts, and to operate drastic simplifications . Politics is reduced to the `pure' relation `proletarians' and `state' where mediations disappear, and parties and unions become part of the state apparatus . In a review of Negri's `Proletarians and the State', Bologna takes Negri to task for ignoring the ways demands raised by workers and forms of struggle against the crisis are turned against them, and points out that divisions run not only between factory and society, but also within the factories; `how many workers, how many factories have found themselves in the past two years faced with the problem of closure, and how many struggles have been burnt out in the alternatives-defence of the wage independent from the exchange value of labour-power or production cooperatives. Guaranteed wage or self-management, closure of the factory or acceptance of restructuring .'[ 181 In `Capitalist Domination and Working Class Sabotage', written in September 1977 after `Proletarians and the State', Negri pursues the theorisation of struggles in society and against the State : the state-form has moved through stages as it has increasingly exercised political control over parts of the circuit of capital to arrive in the contemporary State at `functional control of circulation, of the dynamic nexus linking production and reproduction' . The State has now swallowed up society, and the only contradiction is between it and the process of 'proletarian self-valorisation'-'the power to withdraw from exchange value and the ability to re-appropriate the world of use values' . Since the State presents itself as the 'State-based-on-Income-asRevenue' the wage is no longer an independent variable and wage struggles equal political struggles because they are no longer sited within the large factory but in social struggle over public spending . The objective is `the quantitative raising of public spending to the point of making it incompatible with the maintenance of command over production' . As with the struggle `using' the wage in the past period, the problem is to make it autonomous and `other', to 'destructure' and destroy, to put the phases of the capitalist cycle `out of synch' ; `the socialisation of capitalist development has permitted the working class to transform the diverse moments of communist strategy (the insurrection and the abolition of the State) into a process and to unify them into a project .'[191

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What can be made of this? It points to a transformation in the nature of class conflict which can no longer follow the old paths that lead to the factory, but at such a level of abstraction that it is difficult to assess . My feeling is that Bologna's review of the previous book holds true for this one . The perceptive analysis of the 'Keynesian revolution' has given way to a skimpiness of anlysis that is no longer helpful ; `The form of political discourse is obsolete, the millenarian language is just a "ballbreaker", and this form of theory deserves to be negated like every other "general theory" . . .let us conclude by saying that on this ground debate is no longer possible, it's boring . Better find new ground .'[201 Far more substantial and interesting is Sergio Bologna's own `Tribe of Moles' . For those who have read (or are going tostrongly recommended) Italy 1977-78 : Living with an Earthquake, it can act as a bridge between texts that are otherwise without links, although Working Class Autonomy was conceived as a related project . `The Tribe of Moles' is by far the best account I have seen of the demise of the Italian New Left : it examines the recuperation of the '68 intellectuals, the revival of Third Internationalist politics, the `farcical' re-living of the organisational forms of the traditional Left, and its `error of mistaking the appearance for the substance of the State' . Bologna's own analysis of the formation of a State for crisis-management shows the articulation of 'productivist ideology' against students, state employees and 'marginals' with a `disarticulation' of the `political class composition' within the factories through the `party system' . Although the modalities are very different, it is possible to perceive common features with our own situation . The nature of State repression is of a different order, but Bologna stresses the importance of an authoritarian consensus as `a form more in line with mass social democracy in a period of transition . . . this is a state-form in which it is the masses themselves who act as judge and jury'. But this form, proposed by the PCI, is not yet established, but is a `progressive tendency' ; to prevent its installation the problem is to create channels capable of mobilising the forces of the `disseminated labour' in society, to build a new political composition, adequate to the socio-economic transformations since the last cycle of struggles by choosing `new Mirafioris' in the key links in the economy' . Bologna anticipates criticism : `This approach will be branded "economism" . . .by all and sundry', but I think none the less that the label sticks . His analysis here of the emergence of the women's movement as a 'reappropriation of the body' equivalent to that by the workers' movement in '69 does show the limits of `operaismo' . [ 21 ] This brings us back to the question of fundamental criticisms of Working Class Autonomy as `male, neo-Leninist and very Fiatist' . It has all these elements. It also continues in the triumphalist vein of `Living with an Earthquake', without raising those terrible doubts and fears that plague us here as well as in Italy .

134 Although I think Working Class Autonomy, along with other Red Notes publications, has done great work in making available theoretical and political texts (especially in the context of the Eurocommunist vogue), it still tends to present an uncontradictory picture of struggles in Italy . This collection of writing shows a crisis of politics and theory that is internal to the movements of opposition, and not imposed from outside .[22j The perception of . the need to transform objectives and forms of struggle, and of the emergence of new social protagonists is not matched by depth of analysis and the formation of an alternative project . The crisis is not just the crisis of the bosses as the cover proclaims. In that sense, the dossier on the arrests, which shows how a new type of state is superseding the `democratic' state from within, would suggest the importance of the questions not asked by the operaist tradition as to how the working class is 'conditioned' by capitalist relations of production and reproduction in their broadest sense . For further information on the Campaign in defence of the political prisoners see : Italy '79 Committee, c/o Rising Free Bookshop, 182 Upper Street, Box 135, London N .1 . Footnotes

1 2 3

Italy 1977-78: Living with an Earthquake, Red Notes, 2a

St Paul's Road, London N . 1 . 1978 . CSE Pamphlet No . 1, The Labour Process and Class Strategies, London 1976 . A coming Red Notes publication : Italy 1978-80: Dark

Days . . ? 4 Money and Proletarians is due to be published by Alison and

Busby, London . Unfortunately little Quaderni Rossi material has been translated . Certainly Panzieri's works need to be made available . In Italian they are collected in : R . Panzieri, La Ripresa del Marxismo-Leninismo in Italia, Sapere Edizioni, Milano 1972 . R. Panzieri, Lotte Operaie nello Sviluppo Capitalistico, Einaudi, Torino 1972 . Quaderni Rossi were reprinted by Sapere, Milan 1972 . 6 R . Panzieri, `Surplus Value and Planning', CSE Pamphlet 1, op. cit . 7 Ibid ., pp . 21-2 . 8 R . Alquati, 'Composizione del Capitale e Forza Lavoro alla Olivetti' Quaderni Rossi 2 op . cit . 9 There is a useful account in S . Mancini, Socialismo e Democrazia Diretta, Introduzione a R . Panzieri, Milano 1977 . 10 R . Panzieri in Quaderni Piacentini No . 29, Jan . 1967 ; quoted in G . Becchelloni, Cultura e Ideologia nella Nuova Sinistra, Milano 1973 . 11 S. Mancini, op . cit . p . 100 . 12 M . Tronti, `Lenin in England', Working Class Autonomy and 5

the Crisis p . 1 .

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13 L'Offensiva, Materiali del Movimento Femminista, Quaderni di Lotta Femminista No . 1, Torino 1972 . In English, Programmatic Manifesto of Housewives, Socialist Revolution 9, July 1971 ; Maria Rosa della Costa, Power of Women and the Subversion of the Community, Bristol 1972 . 14 T .Negri, `One Step Forward, Two Steps Backward', Working Class Autonomy and the Crisis, op . cit . pp . 56-7 . 15 Money and Proletarians, op . cit . 16 T . Negri, `Theses on the Crisis', Working Class Autonomy and the Crisis, op . cit . p . 51 . 17 The emergence of other forms of 'autonomism' `anticipated' the Spring '77 Movement (described in Italy 1977-78: Living with an Earthquake) . To name a few, there was the libertarian wing of '68ers such as the Erba Voglio collective, Re Nudo and the Milan `underground' from 1970, Rosso from 1972-3 and the first women's collectives (first Women's Liberation movement's demands, June 1970) and gay organisations (Fuori 1974?) . In many ways they are not an extension of the workers' and students' movement, but a rebellion against some of its practices and theories ; 'operaismo' often entailed an exaltation of masculinity in the figure of the FIAT production-line worker (forms of violence against foremen should also be understood as acts `proving manhood') . Moreover, this workerism produced a quite drastic abolition of personal autonomy (see the example of the wonderful Franco Platania on the collective workerism of Lotta Continua : `At that moment my personal biography loses all interest as far as my individual motivations are concerned . . . I joined Lotta Continua . The important moments of my life tended to become one with the collective moments of struggle that were being shared by the whole working class of FIAT .') It also resulted in the submergence of other areas of social life and struggle (see, for example, how int the medical student's account of FIAT, the hospital and his own concerns become lost in accounts of FIAT workers' struggles) . Significantly, the reaction set in among groups of women, gays and marginalised youth who demanded autonomies for themselves. 18 S . Bologna, 'Proletari e Stato di A . Negri , Primo Maggio No . 7, June 1973, p . 27 . 19 T . Negri, `Capitalist Domination and Working Class Sabotage', Working Class Autonomy and the Crisis, op . cit . 20 S . Bologna, op. cit . 21 For a less reductionist account see Lesley Caldwell, `Church, State and Family : the Women's Movement in Italy', Feminism and Materialism (ed. A . Kuhn), London 1978. And on women and the unions' struggles : F . Bocchio and A . Torchi, L Acqua in Gabbia, voci di donne dentro it sindacato, Milano 1979 . 22 See Dear Comrades, Pluto Press, London 1980 . See also my review in this issue of Capital and Class .

AND CLASS STRUGGLE Review CONSERVATISM POLITICS IN INDUSTRIAL SOCIETY ArtiCle

By Keith Middleman ~ Andre Deutsch (London : 1979), 512pp, £14.95 hb, £5.95pb .

Reviewed by Bill Schwarz

The 1970s brought two elections in a single year for the first time since 1910, minority government for the first time since the 1920s, the fall of a government through parliamentary defeat for the first time since 1922 and at the end, as the fatal blow, thatcherism . The political world symbolised by 1945 and by the Conservative hegemony of the 1950s finally fell apart . This collapse forms one of the critical dimensions to Keith Middlemas's study, Politics in Industrial Society . Middlemas himself is a conventional academic historian Conservative in his politics and-judging by the classic photograph on the back-sleeve of the book-in bearing as well . But like many conservative historians he has a deep perception of social conflict and of class. Not surprisingly, he has had an abiding interest in the history of modern Conservatism, co-authoring a massive biography of Baldwin (1969) . He has also written on the politics of the labour movement in a useful book on the Clydeside MPs in the 1920s (1965) . In editing the papers of Tom Jones (1969) he focused attention on perhaps the key `state intellectual' of the 1920s . Tom Jones was Deputy Secretary to the cabinet and unofficial political adviser to Lloyd George, Baldwin and MacDonald alike (photos of the 1920s show him standing, literally, in Baldwin's shadow) ; he was a lifelong member of the Labour Party who had received his training in fabianism, the ILP and settlement ; philanthropic founder of Coleg Harlech ; and political socialite who mixed with Churchill or the Astors as easily as with Tawney, Cole or the Webbs . The very contradictoriness of this conservative social democrat must have fascinated the social democratic Conservative temparament of Middlemas himself. This latest book, inspired as much by Habermas and Gramsci as by Baldwin or Butler (and possibly, as one reference suggests, in dialogue with the historiography of Hill and Thompson) draws together his previous research into an all-embracing history of the British state in the 20th century . It has been received with glowing reviews, lauded by the New Statesman, and compared to The Making of the English Working Class . Middlemas has himself been given space in The Times-jostling against the altogether harsher sentiments of Bernard Levin's conservatism and windbag journalism-to plead for a return to the consensual tripartite politics of the Second War, as presided over by Ernest Bevin . Indeed he has made little secret of his readiness to drop his

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`philosophical' interventions and, on the word, to join the current administration in order to change the world according to his own Conservative vision. The likelihood of the thatcherites welcoming Middlemas into their fold seems slight . However, if this ambition continues to be frustrated there is no doubt that Middlemas will press on with his own idiosyncratic, ambitious and fascinating intellectual programme. The latest installment, already published less than twelve months after Politics in Industrial Society, is a massive work on the Eurocommunist movement (1980) based on a series of interviews which he conducted between 1976-9 . Briefly, the new book, Politics and the Party, seems to point to a policy of accommodation with 'Eurocommunism' much as in the 1920s Baldwin sought accommodation with Labour . `To suggest that changes in the Communist Parties over the last ten years may stimulate both social democrats and conservatives to put their own houses in order is not a recipe for renewing the political civil war of the 1900s . With the working class long enfranchised, democracy's contradictions occur on more complex lines like the conflict between parties and institutions . Commanding as they do the allegiance of some of the most powerful trade union confederations, appealing still, albeit in competition with the far left, to the marginal people in society, Communist Parties in Western Europe offer possibilities of choice which democratic states might welcome, in their own interest, as an antidote to the bland centre and the fanatic fringe' (Middlemas 1980, p . 337) . The basic thesis of Politics in Industrial Society runs as follows . In the years immediately prior to the First War, and most particularly in the crisis of 1911, 19th century constitutionalism disintegrated . The intractable issue of Ireland above all `seemed to prove beyond question the failure of the classical two-party political system' (p . 51) . In the following decade this gave rise to a succession of government crises (marked by the coalition politics of Asquith and Lloyd George) which oscillated between attempts by the power bloc to win back popular support, and the `above party' refrain which emerged in this period as a decisive political force in its own right. Despite the continuing weaknesses of the British economy, from the early 1920s there developed a newly founded political harmony, organised around a new type of state, which survived until the late 1960s (from Lloyd George to Wilson) : `a continuum almost without precedence in postReformation history' (p . 15) . The foundations for this political settlement can be summarised : i) the concentration of economic forces and the deepening of the capital-labour relation (this is at best implicit) ii) the struggles by the `economic' or corporate representatives of capital and labour for some direct political representatives iii) the absorption of the resulting corporate institutions into the field of state power itself iv) the desperate attempts (in which the General Strike itself can be situated) to regulate and constitutionalise class struggle, and at all costs to prevent any long term confrontation between Government and Class. The political conditions for this settlement rested on the

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CAPITAL & CLASS 12 formation of the representative state with an expanded range of universalistic functions, codified constitutionally by the Representation of the People Act of 1918. But this is not to say that parliament was itself at the centre of the new political order . On the contrary `long before 1945, parliament had ceased to be the supreme governing body and became instead the electoral source of the majority which provided the party element in the government' (p . 22) . In its place emerged the `corporate bias' or brokerage between state, employer organisations and TUC as the foci of power . Within this context Middlemas explains the proliferation of state and private agencies (representing, and arbitrating between capital and labour) to absorb, deflect, reorganise and bureaucratise class struggles. In attempting to free the direct site of production from confrontation, the struggle between the fundamental classes assumed a new dimension within the expanded field of the state itself . The pivot on which this turned was the organisation of public opinion-especially where `public opinion' touched the representative corporate bodies-and the ideological functions of the state took on an unprecedented role . For Middlemas `corporate bias' is the key . He uses the term bias rather than system to demonstrate that it necessarily depended on continual negotiation and struggle . It was at all times a settlement open to disruption . The hasty withdrawal of the 1935 Unemployment Act and much later-as a sign of the end-the collapse of the Industrial Relations Act are two instances he cites to indicate the potential instability of the corporate arrangement . What doesn't emerge very clearly from this picture (and so far as the whole book is concerned, the unfamiliar territory of the post 1945 world is presented with far less confidence) are the specific determinations in the disintegration of this political settlement after forty or so years . The accumulated contradictions in the economy and the consequent inability to deliver the goods, are certainly seen as one, and perhaps the most powerful, determinant . But the explanation thins out at this crucial moment . To extrapolate the core of the thesis like this, presenting it in bare outline, hardly does justice to the weight of the book nor to the highly impressive appropriation of cabinet, trade union and employer organisation sources . But some general observations can be made . One difficulty which follows from the ambitious scope of the study is that the thesis isn't adequately specified historically . For instance, the long span from the 1920s to the 1960s fails to take sufficient account of the 1945-51 administration and the extent to which the political settlement was reconstructed on a more popular and consensual axis . In this lay the preconditions for the deeper, hegemonic settlement in the 1950s which can't be collapsed back into the mould of the 1920s and 1930s . In part this is a theoretical disagreement as well . Middlemas's concentration on the corporate institutions-and his quite sharp assessment of the measure to which there occurred a displacement in the sites of power from the parliamentary to the

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administrative or corporate bodies, especially after the extension of the suffrage in 1918-severely underestimates the continuing significance of the parliamentary arena and the ability of parties to impose unwelcome policies on both employers and unions . Indeed, the location of power in both these fields is a crucial element in understanding the complexity of the expanded state in advanced capitalism . The intransigent and absolute stand by Baldwin on the issue of the constitution in the General Strike cannot be grasped from any other perspective, and much of Baldwin's career was spent in ensuring that Parliament was not occupied by forces hostile to the constitution as such . Linked to this is the development, in the period, of the state as `benefactor' of welfare and an accelerating system of social rights won by the subordinate classes . As much recent work on the `New Liberals' has demonstrated, the recognition of the principle of social rights associated with the welfare state reinforced-and gave some reality to-the constitutional rights embodied in the sovereign political nation . This, again, receives scant attention from Middlemas . But precisely where his approach is valuable is in thinking corporatism as a conjuncturally specific "orm of representation . He does not, like some political theorists, see corporatism as a particular form of economic organisation in contemporary societies ; nor as a form of representaion necessarily lmked to the heightened concentration and centralisation of capital associated with monopoly capitalism . Rather, his stress on the corporate bias suggests a form of representation which is the resultant of class struggles . There may well be historical reasons why corporatism appeared in the early stages of monopoly capitalism-such as the reorganisation of capitals, and the increasing need for parties to recognise working class opinion as a whole-but this cannot be deduced theoretically . Middlemas insists that the peculiarities of the English settlement of that general European crisis of 1917-20 depended on a specific conjunction of i) the emergence of organised business and trade unionism closely related to the political parties ii) the commitment by the working class to parliament and iii) the containment of the revolutionary elements . The logic which follows from this is one which highlights the possibilities for the corporate bias to be dissolved or curtailed by the dominant bloc (thatcherism) and new forms of representation instituted. Central to this explanation is his treatment of consensus, and at this stage in his argument he touches on a historical point of decisive contemporary relevance : the formation of the representative-interventionist state . Middlemas is too serious a historian to be deluded by the propaganda of the corporate brokers themselves . While on balance he tends to favour the system he describes, he is quite aware of this constraints and limitationshow far in practice it was undemocratic, and that at best it only ever achieved `apathetic' consensus-which as a realist and Conservative, he swallows . (Compare this to the mindless apolo-

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CAPITAL & CLASS 12 getics for Lloyd Georgeism, prompted in this instance by the Liberal Party's dalliance with the idea of coalition in the late 1970s, delivered by Kenneth Morgan, 1979) . It is here that his perception of classes in struggle pays off, for he spurns all idealist, constitutionalist interpretations in which an orderly parliamentary democracy was nurtured into being under the benevolent eye of our watchful rulers, and the people slowly incorporated into the process of securing the `free competition for political leadership' (McKenzie 1964 p . 646) . An important source for such constitutionalist readings is Walter Bagehot who identified from early on a central principle of the system of mass democratic parties when he praised `the regulating wheel of our Constitution' which allows the free movement from `Parliament Number One to Parliament Number Two' (1978 p . 222) . The basis for the rotation of political parties was in the process of being constructed, sealed ideologically by those who eternalised it in history and hoped to ensure its permanence in the future . When this is carried forward into the 20th century the ideology of a political continuum begins to strain . It can only operate by telescoping the political history of 1910-26 into a smooth, ordained transition from `Liberalism' to 'Labourism', thus performing a neat historical lobotomy in which the pre-war crisis is transmuted into a mere `surface appearance' . In a recent collection of essays on England from 1900-1914 we are told by Walter Arnstein that `Beneath the agitated surface of Edwardian England . . . the nuts and bolts of two-party politics, both at the parliamentary level and at the constituency level, remained in place' (in O'Day 1979, p . 78) ; and by Dennis Dean : `A disciplined, stable organisation was prepared to take advantage of the leap into mass democracy which came with the end of the 1914-18 War and the 1918 Reform Bill . This, rather than the syndicalist fury, was the true legacy of the pre-1914 period' (O'Day, p . 112) . Against this, Middlemas has a sure grasp . Both of these statements conceal the breakdown in the rotation of the parties, the dislocation imposed by the War, the temporary collapse of the two-party system, the disciplining of labour by a sustained attack on its primary defensive organisations, and the tenor of a radical, aggressive Conservatism which oversaw this extended crisis . To think that the `nuts and bolts' or pre-war constitutionalism remained in place is vacuous. The whole edifice was thrown into crisis, effectively dismantled, and slowly reconstructed to emerge as a new political formation . Similarly, Middlemas is miles away from that antiquated liberalism which perceives the principal themes of the `English ideology' threatened by incipient statism at the beginning of the 20th century . A . J . P . Taylor, for example, begins his popular account of modem English history with the unforgettable observation : `Until August 1914 a sensible, law-abiding Englishman could pass through life and hardly notice the existence of the state, beyond the post office and the policeman . . . broadly speaking, the state acted only to help those who could not help

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themselves . It left the adult citizen alone' (1970 pp . 25-6) . The very ease of phrase inspired by unquestioned shared valuesthe sensible, self-sufficient, lawful, masculine subject-paradoxically betrays not only the assumptions of the author, but of far more interest, the ideological constructions which lay right at the heart of state development itself . More in tune with Middlemas is the argument which suggests that around 1914 (the date varies) a fully democratic political culture was established and the extremism of the previous age could no longer be condoned . Indeed, violence had been 'conquered' and the consensual foundations of the political system legitimated the state's exclusive right to resort to violence . This thesis is explicit in Critchley (1970) but can also be found, implicitly, in Brian Harrison's study of the anti-feminist campaign in which he declares, as a central conclusion to his investigation, that `there was an ebullition of hostile violence at the very point at which the case for reform had been fully established' (1978 p . 191) . Or as Lord Russell was arguing at the height of the great fear which surrounded the debates on the extension of the suffrage at the end of 1917, the franchise should be widened `for the protection of the State, in order that through the ballot-box the State may learn from the organised opinion of those who have grievances and who desire their remedy, what those grievances are . I suggest that the vote is granted nowadays on no kind of fitness, but as a substitute for riot, revolution and the rifle . We grant the suffrage in order that we may learn in an orderly and civilised manner what the people who are governed want' (Harrison p . 220) . This is a conception perhaps closer to the Webbs than to the rest of the Lords (see Winter 1974 pp . 34-6) . The interest of this sort of argument is that in its emphasis on the breaking of class apartheid, the opening of civil society, the incorporation of the subordinate classes and of women into the civic apparatuses appropriate to a democratic nation-all of which frame and condition ideologies of citizenship-it connects with theories of the expanded or integral state organised on the principle of constitutional universalism . In this version the key is the fluent transmission of public opinion through the body politic, which holds back the poison of extremism . A new civilisation is on the point of emerging, operating by consensus and tempered by the rule of law . Integral to the Middlemas thesis however is the emphasis on the inherent instability of the settlement or `conquest', and that it was its vulnerability that called for an intensification in the ideological role of the state . It is argued throughout the book that the period just before and after the First War saw the construction of `public opinion'-especially the organised representations of the working class-as a real determinant . This placed objective limits on the manoeuverability of the power bloc, such that the government established `a direct link with public opinion, whose consequences were ultimately as significant as the expansion of the suffrage itself' (p . 337) . Revealed alongside this, with great

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CAPITAL & CLASS 12 insight, is the full extent of the management of public opinion . This appears to have reached its most fearful pitch precisely when the situation was most desperate-the image of Bonar Law planning to summon vigilante stockbrokers, speeding along the railways to have a go at the strikers, is one that resonates in the mind -when the power bloc contracted and was reorganised behind the political fortifications of Lloyd George's coalition from 1916 to 1922 . The interpenetration between the activities of public agencies, the private initiatives_ of the political leaders, the vitriolic conservatism pumped up to mass circulation by the press barons, the employers' organisations and militant conservative and proto-fascist sects is quite daunting. (By the end of the War Beaverbrook, Northcliffe and Rothermere were all at the Ministry of Information ; and at one point Lloyd George attempted to buy up The Times) . According to Middlemas, an organisation set up by Lloyd George in 1919 devoted to 'Anti-Bolshevism and Increased Production', funded by the industrialists (chiefly the Engineers' Employers Federation) could by 1922 arrange articles to be printed in more than 1,200 papers and magazines . Although these machinations of the Coalition may have gone over the top, Middlemas is insistent that the very logic of the corporate pact necessitated the careful and deliberate organisation and regulation of public opinion and government secrecy . This impelled the movement towards the `state within the state' . The picture which begins to emerge from this account is of the field of state power itself constructed by the conjunctural balance of 'class struggle, as the field of force which is the 'condensate' of class struggle . In this sense Middlemas is right to stress the effects of working class organisation as constraints which operated inside the state just as he is right to stress the relentless pressures from the power bloc to disorganise the political and defensive institutions of the working class . More could have been said on the historical and structural conditions for this balance of class forces at the beginning of the century and on the fact that, unlike Germany or Italy, critical democratic advances were made before the upheavals generated by the formation of monopoly capitalism . None the less this approach allows Middlemas to focus on the recomposition of the apparatuses of the state in the period of the construction of the corporate bias . `As Llewellyn Smith predicted in the 1900s, the notion of a Ministry of Labour led inevitably to the transposition of industrial conflict inside central government, as trade unionists battened on to the sympathies of the new Ministry to obviate employers' traditional predominance in the mind of the Board of Trade' (p . 227) . Or as Middlemas succinctly concludes : `To put it simply, what had been merely interest groups crossed the political threshold and became part of the extended state' (p . 373) . This process of incorporation involved the power bloc .in the `education' of the corporate bodies and the persistent disciplining of their militant wings . Particularly, it hit hardest at the very

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mainsprings of the syndicalist and shop stewards' movements . From 1916 until the General Strike a common objective of the political leaders was to establish the TUC as the organised representative voice of the whole of the working class in order to contain and isolate the militants . One can talk of two conceptions of trade unionism in this period : that represented by Bevin, Citrine, Gosling, Pugh and the TUC, against the shop stewards, the Triple Alliance itself, and indeed most of those involved in the General Strike . (This parallels Foster's rather more instrumentalist interpretation, 1976) . In this conjuncture the dominant issue was not trade unionism or no trade unionism . The determinedly antiunion onslaught of the employers was spent by the first years of the century and, by 1906, a provisional resolution existed in law guaranteeing trade unions' unprecedented legal rights . In 1919 Churchill could complain that `The curse of trade unionism was that there was not enough of it, and that it was not highly enough developed to make its branch secretaries fall into line with the head office' (quoted p . 143) ; or Bonar Law, more fatefully, `Trade union organisation was the only thing between us and anarchy' (p. 144) . The desperation of these pleas must be read, of course, with some scepticism, for they were both drawing attention to the possibilities for the permanent development of a different kind of trade unionism to the one which was threatening the state as nation, which represented the whole community and which was to be clearly echoed in 1972-4 . In this scenario the TUC could be presented as the national representative of working people against the `factional' elements of the Triple Alliance and Minority Movements . (When in the first days of the General Strike this looked as if it was on the verge of backfiring the opposite argument could be mounted, relying on the supposed conservatism of the rank and file to act as a counterweight to the radicalism of the leadership . Thus on the 4th May Baldwin wrote to Tom Jones : `We shall have to find some way to deal with all this Trade Union business and revise its powers and machinery so far as the Government is concerned, in the light of this tremendous centralising of their powers . We must get some way by which the voice of the rank and file can be made effective' . Middlemas and Barnes, 1969, p . 413 .) This strategy appears to be sanctioned by Middlemas on the grounds that the employers had to face the same challenge, to learn the same rules of the constitutional game, and to fight against their own diehard militants . In an assessment which draws from fairly orthodox bureaucracy theory he argues that the formal institutions of employers and unions came to mirror each other . And in the end-qualified only by the Milibandian depiction of the cultural affinities of government personnel to the employers rather than to the labour leaders-the arguments rests on the acceptance of the impartiality of the state, founded on constitution and public opinion, arbitrating between the equally weighted corporate institutions of capital and labour . Even on empirical grounds parts of this interpretation are questionable . By

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CAPITAL & CLASS 12 excluding the parliamentary dimension from full analysis Middlemas hardly touches on the heavily Conservative weighting of the settlement . Nor is there a great deal of credibility in the actual concept of consensus if one side of the bargain is so effectively excluded . The `dinosaurs' of the Triple Alliance, shop stewards' movement, the miners, the Minority Movements and the National Unemployed Workers' Movement hardly seem to balance the `dinosaurs' of the mine owners, although there is little doubt that Baldwin was quite content for miners and mine owners to fight it out through the long months of 1926-so long as he was sure which side was going to win . Nor is the argument (first put by Marwick 1964) very convincing that the 1930s was a period of social harmony . Certainly it is true that, comparatively speaking, industrial relations were quiescent in the 1930s, due in part to a mixture of `high wages', unemployment and most of all, the battering the labour movement had received in the previous decade . However it may be (as Addison suggests, 1980) that it is the relatively untroubled industrial relations which explains corporatism, and not the other way round . There is nothing in Middlemas which proves the point one way or another . Despite the critical conceptual elision between a relatively autonomous state as the condensate of the balance of class forces, and a state fully autonomous and impartial set free from structural class determinations, Middlemas's account does not derive from the simplistic pluralism of mainstream political sociology . The inescapable fact is that whether pluralist or not, the social system is profoundly rent by class division . The implication of his peculiarly social democratic reading appears to be that so long as individual-constitutionalist rights are reinforced by effective class representations and cemented by organised public opinion, the effects of class division can be overcome . And hope for the future rests only on this possibility . Much of my own assessment may seem to have fallen within the parameters of the Middlemas thesis . Partly this is because it is a pioneering analysis of the formation of the representativeinterventionist state which takes as axiomatic class struggle . On many points, of course, the distinction between Middlemas and any socialist reading must be absolute . Most important of all must be the recognition of how profoundly undemocratic was the nature of the corporate settlement . It was unbalanced at its very pivot, unequally weighting the power of the employees . The relation between state and capital is a structrual relation of great complexity which can't be reduced to any formal, institutional similarities with the connection between the state and the trade union movement . There is nothing at all in the book on the description of capital at the workplace, about which a massive literature was developing in the period . On the trade union side, much more needs to be said about the bureaucratic leadership which effectively constrained and hobbled not just the countless `extremists' but, in its very conception, much that was radical, positive and

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assertive in the rank and file of the labour movement . One need only read Wal Hannington's magnificent Unemployed Struggles in order to put into perspective and counter the deep conservatism of the Middlemas interpretation of the inter-war years . But then the unemployed were excluded from this corporate pact . So for that matter were all those who had no claim to organised trade unionism : in any real sense-in any sense of effective powerwomen had no place in this settlement . Corporatism, almost by its very definition, could not accommodate those struggles generated by non-class antagonisms . Middlemas's `consensus' begins to appear less as `apathetic' than the product of a series of primary defeats inflicted on the labour movement, which preconditioned the possibilities for constructing this supremely non-popular corporate hierarchy . When it comes down to it Middlemas is instinctively drawn to the bureaucratic edifices, immersing himself in the records of the employers' organisations or the trade unions, able to understand the credited leaders of a movement . But his Conservative imagination seems incapable of actually penetrating working class culture . (A similar point was made long ago by Hinton, 1965) . Similarly he can see the growth of formal democratic rightsthe suffrage, legal recognition of trade union activities, `public opinion'-but what these may have meant substantively eludes him . There is little sense of the reality of the narrow band of social rights, of how they were experienced by the subordinate classes, and nothing at all of the popular outrage which fired the miners, the hunger marchers or those subjected to perpetual speed-up . This, it is true, opens tricky ground, for it can invite the inverted reading in which every district is transformed into a Little Moscow, and every union member a militant socialist . This of course is not the case either-for there were working people who also read The Daily Mail, voted for Conservative or National governments and adored the monarch . Very little is known about working class conservatism in the first half of the 20th century . But in Politics and Industrial Society (and much the same applies to Burgess's parallel attempt at explaining `incorporation', 1980) there is no grasp of the doubleness of working class culture as the site of the reproduction of labour power and as a field of contest, negotiation and resistance . There is no sense gained of the manner in which syndicalist direct action and 'labourism' can both provide meaningful solutions, in which the TUC bureaucracy and the Minority Movements both grow from the same ground andwhatever the strategies of the power bloc-both are the products of the `good sense' of working class culture . To follow up these problems, trying to understand how state strategies work upon and construct this terrain, would ultimately produce a very different kind of history to the one presented by Middlemas . During the debates on industrial conscription some of these questions must have been in Balfour's mind when he asked in the cabinet : `If they prove recalcitrant, how are they going to be coerced?'

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CAPITAL & CLASS 12 The publication of Middlemas's study, in conjunction with other Conservative histories of modern politics, may suggest a break with the more traditional (biographical) Conservative historiography . I guess that this rejuvenated spirit of inquiry has rendered Lord Blake's insistent belief that `history is a good story' something of a liability for the new Conservatism of the late 1970s and 1980s . Kenneth Morgan's reinterpretation of Lloyd Georgeism was inspired-if that is the right word-by contemporary Liberal Party aspirations : the collective intervention by Peter Clarke (1978), Michael Freeden (1978) and Stefan Collini (1979) in political and intellectual history, recuperating the tradition of New Liberalism as an alternative to both statist socialism and hard faced conservatism, has quite clear political intentions . What is so remarkable is that there exists no comparable socialist and marxist analyses of the development of the British state in the 20th century . So far as I can remember neither the CSE Conference nor the Communist University of London has ever devoted any space to contemporary state formation in its historical dimension . This represents a serious strategic failure . It is all the more remarkable when one considers the extremely rich body of historical work within English marxism, the amount of sustained theoretical inquiry which has developed around the question of the state, the urgent theoretical and historical questions triggered by the imposition of a new constitutionalauthoritarian regime which has recast the political field and set about reversing rights which at one time seemed secure, and aboveall, the very centrality marxism gives to the state in political strategy . Yet an adequate socialist understanding of the development of the contemporary British state, concretely and historically, has been overshadowed . Conservative historiography is presently in command .

BIBLIOGRAPHY Paul Addison (1980) : `Review of Politics in Industrial Society' Times Literary Supplement (2 May) . W . Bagehot (1978) The English Constitution . Keith Burgess (1980) The Challenge of Labour . Peter Clarke (1978) Liberals and Social Democrats. Stefan Collini (1979) Liberalism and Sociology . T . A . Critchley (1970) The Conquest of Violence : Order and

Liberty in Britain. John Foster (1976) `British Imperialism and the Labour Aristocracy' in J . Skelley (ed) 1926 The General Strike . Michael Freeden (1978) The New Liberalism . Brian Harrison (1978) Separate Spheres : The Opposition to the

Women's Suffrage Movement . James Hinton (1965) `Review of The Clydesiders' New Left

Review 37 . Arthur Marwick (1964) `Middle Opinion in the Thirties' English

Historical Review Vol . 79 . R . McKenzie (1964) British Political Parties .

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Keith Middlemas (1965) The Clydesiders . Keith Middlemas (1980) Power and the Party . Changing Faces of Communism in Western Europe .

Keith Middlemas, J . Barnes (1969) Baldwin . Keith Middlemas (ed) (1969) Tom Jones. Whitehall Diary 1916-30 (3 Vols .) . K . O . Morgan (1979) Consensus and Disunity : The Lloyd George Coalition 1918-22 .

A. O'Day (ed) (1979) The Edwardian Age : Crisis and Stability 1900-14 .

A . J . P . Taylor (1970) English Social History 1914-45 . J . M . Winter (1974) Socialism and the Challenge of War .

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Reviews PASSIVE REVOLUTION : POLITICS AND THE CZECHOSLOVAK WORKING CLASS, 1945-1948 by Jon Bloomfield Allison and Busby (London ;

Reviewed by Mark Harrison `A faraway country of which we know nothing'-Czechoslovakia has made a special contribution to European history . Born in the ruins of the Habsburg empire in 1918, Czechoslovakia was constituted a bourgeois parliamentary republic in the following period of European reaction . Dismembered at Munich in 1938, occupied and plundered by Nazi Germany, post-war Czechoslovakia emerged from the fires of partisan warfare and liberation by the Red Army in 1945 . Its socialist revolution of 1948 consolidated fundamental social progress, but also led to the Stalinist suppression of democracy . Two decades later the forces of socialism and democracy were reunited in the Prague Spring of 1968, then suppressed by another invasion, contributing nonetheless a further vital impetus to the advance of socialist ideals . But Czechoslovakia's unique experience, belonging neither to East nor to West but to the whole of Europe, has suffered both from ignorance and from distortion. Passive Revolution is Jon Bloomfield's tribute to the history of the Czechoslovak working class between 1945 and 1948 . The book falls into four parts : an account of the pre-war republic and its destruction ; the rebirth of Czechoslovakia in 1945-45 through its `national and democratic revolution' ; the role played by the Communist Party of Czechoslovakia in organising the working class for socialist revolution, including a close analysis of Stalinism and the role of the USSR ; and the unfolding of the February 1948 events. The book is based in Czech primary and secondary sources, including archive materials of the Czech labour movement . It is bound together by the historical interplay between ideals and realities. On one side we find the bourgeois forces in post-war Czechoslovakia, seeking a return to the pre-Munich capitalist democracy . But their social basis had been eroded away by the Nazi looting of Czech capital, by the Red Army liberation and by the state-dominated dynamic of post-war reconstruction . National antagonisms between Slovak and Czech, historically fostered by capitalism, now

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hindered the emergence of a right-wing coalition . International tensions, culminating in the Cold War, further discredited the conservative, Western-oriented politicians . They had no practical alternative to friendship with the USSR or to social advance on terms made by the working class . Their strategy depended on a successful demobilisation of the working class movement and the restriction of active political participation to parliamentary leaders ; consequently as the movement mobilised against them, they could offer workers no alternative forms of activity or particpation to those offered by the Communist Party . Bloomfield shows the Czechoslovak working class, on the other side, rising out of the war on the basis of new military and economic organs of political self-determination . These were the foundations of its revolutionary elan-deeply underestimated, he argues, by the Communist leaders who returned from exile in Moscow in 1945 . This was the most developed, mature working class of Central Europe . At the same time, however, Czechoslovak workers recalled important negative lessons of their own history-the politcal, religious and national fragmentation of their pre-war trade union movement, and the reliance on illusory Western guarantees, both of which had paved the way to Munich . Consequently in the period between 1945 and 1948, Czechoslovak workers readily accepted the lead of the resurgent Communist Party in two directions : firstly towards friendship and military alliance with the USSR ; and secondly towards reconstruction of the trade union movement on centralised, authoritarian lines, subordinating the spontaneous forms of shop-floor self-management to bureaucratic discipline from above . The Czechoslovak Communists themselves had at their disposal several different experiences . From the Communist International of the 1930s they had learnt the sectarian political model of `Class against class', as well as the succeeding model of defensive antifascist alliance through the Popular Front . From the wartime period the Communist Party had differentiated itself into an internal and an external organisation . The internal leaders had learnt new forms of grass-roots politics, but they fully accepted the return of the external leaders from Moscow and reversion to the pre-war moulds . At each critical moment the choice between the options in Czechoslovakia was resolved by the intervention of an external force from Moscow, rather than in response to Czechoslovak conditions . Thus while the USSR was committed to a continuation of the wartime alliance of the Big Three into the post-war period, the Czechoslovak Communists pursued a domestic strategy of national unity and antifascist alliance, subordinating this to the issue of socialist advance . But when the Cold War ruptured Stalin's vision of post-war partnership between the great powers, and rendered essential the consolidation of Soviet influence in Eastern Europe, the Czechoslovak Communists swung onto the offensive and pursued a revolutionary course . Bloomfield defines this course as `passive revolution' . It involved the mobilisation of a broad social alliance around the unified disciplined core of the working class movement . The mobilisation, the alliance and the unity were all genuine . But they were inspired primarily through Communist leadership from above . The decision to shift onto the offensive was not initiated from below, nor in the course of the February 1948 events was any distinctive contribution made by

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the working class mass organisations independently of Communist direction. There was no discussion of the model of transition to socialism which was being implemented, nor of the model of socialism itself. These were implicitly constructed according to the Stalinist conceptions of the Communist Party as the sole directing force in the working class and in society, with the mass organisations as its `transmission belts' ; and of socialism as a monolithic, centralised structure without political contradictions requiring democratic resolution : `the working class was a largely willing accomplice of the revolution, but not its driving force . . . Thus while this period saw the decisive removal of capitalist property relations in the economy, the political power that shifted into the hands of the working class was limited .' This viewpoint leads Bloomfield to reject some false alternatives. The revolution was not carried out by a working class prepared and organised to govern directly ; nor was it the conspiratorial coup of an elite minority . Stalinism was not simply imported or imposed ; it was adapted to Czechoslovak conditions, experiences and institutions, finding its own social base beyond the frontiers of the USSR . At the same time the author tries to rescue a real historical alternative to `passive revolution', in which are to be found the antecedents of the Prague Spring and of Eurocommunism . This lends to the book its contemporary significance . At the same time, the author's own commitment to the reunion of socialist revolution and democracy does not hinder the reader or obscure the subject, but on the contrary moves and illuminates . The reader will be irritated by some aspects of the book's editing . The footnotes are placed at the end of the book, not the foot of each page ; in a properly researched work of history it should be possible for the reader to study the text's sources without constantly breaking continuity and concentration . Too many organisations are referred to by their Czech initials-again, a glossary of abbreviations at the beginning does not fully overcome the barrier to speedy comprehension . Apart from these points the text is well written and rapidly exerts an absorbing fascination .

HEALTH IN DANGER : THE CRISIS IN THE NATIONAL HEALTH SERVICE By David Widgery Macmillan (London, 1979) 178 pp ., £2 .95

THE POLITICAL ECONOMY OF HEALTH By Lesley Doyal with Imogen Pennell Pluto (London, 1979) 360 pp ., £4 .95

Reviewed by Mick Carpenter In the reviews section of Capital and Class 8 I bemoaned the lack of published material on health in this country written from a socialist perspective . The two books reviewed here go some way towards remedying that neglect, and are therefore to be welcomed . Of the two, however, The Political Economy of Health is far superior,



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even though Health in Danger is likely to enjoy a much wider circulation and be regarded by many as the alternative, socialist perspective on health issues . Although Health in Danger is written in a commendably readable style, the dominant perspectives and main conclusions are questionable . The opening is promising, being a personalised and moving account of David Widgery's work as a GP in the East End of London . Although prominence is given to the deteriorating innercity health service, he also begins to illuminate the relation between class and ill-health in an urban environment . Unfortunately, this initial promise is not fulfilled by the remainder of the book . Despite its title, this is not a book about health as such but one about the health service . Many of the book's deficiencies derive from this failure to start from first principles . Without any means of locating the analysis in an understanding of the relation between health and capitalism, David Widgery necessarily falls back on an approach to the NHS that borrows heavily from the categories of Fabian social administration . We get the impression that, bit by bit, the NHS has been making steady progress against penny-pinching governments . Now this is all placed in jeopardy by swingeing expenditure cuts imposed from the mid 1970s at the behest of the International Monetary Fund . It is also being undermined by private medical interests and profit-hungry pharmaceutical companies . This is the main plot, and its accusations are not entirely without foundation . However, the book also has a sub-plot which, for careful readers, provides more than purely circumstantial evidence for the view that the NHS is not such an unblemished institution after all . Many of the issues raised in the margins do not solely relate to financial constraints or capitalist haymaking at the expense of the NHS. Here and there David Widgery expresses doubts about the value of some high-technology medicine ; he indicates that medical care is sometimes sexist in its treatment of women (though equivocates over causes) ; bemoans the lack of resources devoted to primary care, and documents the long-standing neglect of the psychiatric and mental handicap sectors . These marginal doubts do not amount to a sustained and critical assessment of the NHS, but are sufficient to give the book a contradictory character . By the end of Health in Danger, however, all reservations are abandoned and overwhelming emphasis placed on cutbacks as the major obstacle to the achievement of a socialist NHS . Of course much is in danger-but the dangers to health are wider than those to the health service . Neither are they particularly new . Health is not something working class people possess which has suddenly been placed in danger . This is one of the problems with the politics of defence . The limits of its horizons are to restore what existed before, about which it often fosters illusions. Behind the call to defend the welfare state is the assumption that it exists . David Widgery's book exemplifies such problems . Failing to establish sufficient critical distance between himself and the profession to which he belongs, his dominant assumption is that the NHS is basically sound . Given sufficient resources, the prohibition of private medicine, a nationalised pharmaceutical industry and decent pay and conditions for all its workers, it could do the job for which it was intended . Presumably the dangers to health would not then threaten . Yet such steps would not touch the social causes of ill-health . Who is

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CAPITAL & CLASS 12 to say that a state-run pharmaceutical industry would be that different? Even if public expenditure cuts were restored in full, how much of the increased resources would find its way to the East End of London where Dr. Widgery practices? Of course there is a need to fight against cuts, but without illusions about what is being defended . As well as fighting for more money, we must also demand the right to decide how it is spent . We must do more than restore what existed previously, but seek to transform the NHS into something it has never been . We need a strategy for achieving popular power in the health service, alongside a concerted attack on the social causes of ill health . These concerns flow more naturally from the perspectives adopted in The Political Economy of Health . The authors start from health rather than cuts and have laid solid foundations out of which a comprehensive political strategy may be constructed. The scope of the book is ambitious and impressively realised . The health service receives its fair share of attention, but the authors do not let the gains represented by the NHS blind them to its defects . Most importantly, the authors do not equate health issues with the NHS, but firmly ground their analysis in an examination of the connections between ill-health and the capitalist mode of production . They take a historical as well as contemporary approach to their subject. They consider health and illness in the Third World as well as in metropolitan countries, detailing the effects of both colonialism and more recent neo-colonial systems of domination . As well as showing the relation between class and health, prominence is also given to sexual politics. To have woven all these strands together is a considerable achievement especially since it has never been attempted before . It may seem carping therefore to point out omissions . Yet some are politically significant and need to be pondered by those wishing to build on their analysis . One of the most glaring is the lack of attention given to mental health . Despite their clear statement that the concept of `stress' provides a key linkage between physical and psychological disease, most of the book is concerned with somatic illness. A more extended discussion of mental health would have permitted a more thorough exploration of . the cultural politics of health . The cultural basis of many definitions of health and illness, and their implications for personal politics has been confronted most by those involved in radical therapy, yet the issues raised are also relevant to the analysis of somatic disease . If stress is at the root of much ill-health, personal politics may be relevant to its prevention . Of course, many stressors can only be combatted by concerted political action, including those resulting from economic insecurity, poor living conditions, intensification of work and an increasingly dehumanised division of labour. Yet there is much we could do here to begin transforming the disturbed relationships that derive from an antagonistic society . My impression is that there is considerable room for improvement within the socialist movement itself . This leads into my fundamental criticism, that the book fails to specify the different approaches possible within a political economy of health . Some of these would give sufficient prominence to issues of personal politics, while others might largely screen them from view . For example, a vulgar political economy might deterministic-

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ally view the causes of ill-health as entirely external to people and hence devise strategies for dealing with `structural' factors . A more cultural (and I believe) better approach would not entirely disagree, yet would leave more room for us to change ourselves as well as, or as a way of changing the system. In such ways are politics and methodology intertwined . Though Lesley Doyal and Imogen Pennell are by no means vulgar determinists, they seem to assume the existence of a unitary approach to the political economy of health . In fact the same problems of method confront us in this sphere as in Marxism generally . Regretfully the authors nowhere try to situate their approach in terms of these debates . My final criticism is to wonder at the strange lack of consideration given to health and health services in post-capitalist societies. The brief references to the barefoot doctor experiment in China question its general applicability in the Third World or for that matter elsewhere . They draw the important conclusion that its relative success is inseparable from the wider social transformation of which it was a part . But there is no systematic attempt to draw a balance sheet of experience in China, the USSR or Cuba . It is a shame that they did not extend their analysis in this direction, and draw out the political implications . Despite these reservations, this is a remarkable book which deserves a wide audience . The case for a political economy of health is carefully and painstakingly constructed from an impressive marshalling of evidence, synthesised into a total perspective on health, in an accessible style . In this book a break has finally been made in this country with Fabian traditions of analysis, and the superiority of an approach based on political economy is amply demon . strated. By asserting that health is a fit subject for political economy, Lesley Doyall and Imogen Pennell have begun to reappropriate it from the medical profession where the Left have let it lie . That process can only be completed in practice by working class and other oppressed people themselves . The painful lesson to be learnt is that there is no department of social life or knowledge which the socialist movement can afford to leave to one side and trust to others .

WORKERS' COUNCILS IN CZECHOSLOVAKIA 1968-69 Edited by Vladimir Fisera Allison and Busby (London 1978), pp . 199. £8.50

Reviewed by John Solomos To those engaged on theoretical and concrete work on socialist transition this book provides a useful collection of Czechoslovak source materials. The editor has brought together a wide variety of texts written by participants in the 1968 events in Czechoslovakia . On the whole a balance is maintained between the official (state and trade union) documents, and the views of rank and file activists. It thus provides the reader with a range of conflicting and insightful viewpoints on the 1968 events, though there

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CAPITAL & CLASS 12 are limits to what a collection of documents can transmit . Starting out as a way of increasing production and providing support for the `reformers', the idea of workers' control spread very rapidly, to the extent that it even allowed the workers to impose certain limits on the actions of the state and party apparatuses. The responses to this process varied, but ultimately the process of 'normalisation' enforced by the Soviet invasion destroyed any real autonomy that the workers had gained . In broad outline this was the course of events which the texts trace in the words of some of the participants . Unfortunately, the introductory notes provided by the editor are not an attempt to pick out some basic arguments and add very little to the understanding of the workers' council experience in Czechoslovakia . The main task of Marxist analysis of such historical experiences must be to locate the specific class forces involved in the various political, ideological and economic struggles . The merit of this book is that it provides some of the basic raw materials for such analysis, but the theoretical grounding has a long way to go .

The following books reviewed in earlier issues are now available in changed format : Roman Rosdolsky, The Making of Marx's Capital, Pluto Press (review : Capital and Class 6, 1978) is now a paperback at £5 .95 . Folker Frobel, Jurgen Heinrichs and Otto Kreys, The New International Division of Labour, (review of German edition : Capital and Class, 7, 1979) is now published in English by Cambridge UP at £25 hardback .



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CRITICAL

POLICY S®cIAL 4 An introuction to the new Journal, due to be published in April 1981 . Given our desire to reach a varied audience, contributors will be asked to write in an accessible style without necessarily avoiding difficult theoretical issues . Our priority is to develop a debate about political strategies for welfare . In keeping with this objective and in the hope of making a contribution to such strategies this journal will provide, as a regular feature, reports and reflections upon current conflicts, campaigns and struggles being undertaken in the field of social policy and the welfare state . It is intended that the journal will be international in its content and audience .

SUBSCRIPTIONS Critical Social Policy will he published termly in January, April and September . Beginning in April 1981 . Single Issues £2 .00 Annual Subscription (3 issues constituting 1 Volume) . . . £5 .00 Institutional Subscription (3 issues constituting 1 Volume)£I0.00 Orders for single issues or subscriptions to be sent to : Gordon Peters, Business Manager, Critical Social Policy, 46 Elfort Road, London N5 . Cheques payable to 'Critical Social Policy' .

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