Capital & Class. - 1982. - Issue 18 issue 18

The transatlantic economic disaster

MU 4) CO

The stagnating seventies saw a steady haemorrhaging of support for Keynesian economic propositions amongst bourgeois economists compared with the buoyant sixties . With the elections of 1979 and 1980 this trend penetrated state policy making in a strident form in both Britain and the United States. Now, with over three years of Thatcher's monetarist experiment and nearly two years of Reaganomics behind us, the end of the recession has been indefinitely postponed on both sides of the Atlantic . Simon Mohun looks at the results of theoretical departures in practice . Conventional macroeconomic wisdom, as taught to undergraduates,

CAPITAL AND CLASS

6 focuses on how - by judicious use of

fiscal and monetary policies - governments can determine and control the level of aggregate demand in pursuit of growth, price stability, a balance in external payments and, of course, full employment . As undergraduates progress with their study of macroeconomics, they discover a debate as to whether monetary or fiscal policy is more effective in the pursuit of these goals . From the late sixties on, the drift in the debate has been toward regarding fiscal policy as not terribly effective, and towards seeing monetary changes as the primary causal factor in the determination of overall economic activity and hence employment . Next, undergraduates learn that this apparently technical issue is not amenable to straightforward resolution because it is inextricably intertwined with a rather different set of issues . These are concerned with whether government economic policy should be active and discretionary, contingent on particular situations, or whether policy should be passive, relying upon predetermined rules regardless of the particular situation . An active policy stance might say that the government should continually alter its taxation and expenditure policies, for example, in order to maintain full employment ; this is occasionally called `fine tuning' the economy . A passive policy stance might say that the money supply, appropriately defined, should be increased by the same fixed percentage amount each year . Equally undergraduates will probably hear, as they plough through formal models of increasing sophistication and complexity, that the activist/non-activist debate depends upon whether the components of private sector expenditure (consumption, investment and net exports) are believed to be stable . Stability is understood here as not meaning never changing, but rather involving the con-

ception that destabilising changes in the aggregate generate changes in prices which in turn, smoothly and automatically, give rise to self-correcting changes in quantities . This is just a generalisation of the idea that if the demand for a good exceeds its supply, its price will rise, choking off demand and encouraging more supply until a situation of equality between demand and supply is reached . In other words the debate turns on whether you believe the market mechanism overall is a stable, equilibriating mechanism or not . On top of all this, whichever position is taken, macroeconomic theory is rounded out with the advice of practical men (almost never women) as to the degree of trust that should be placed in the very feasibility of government policies having any stabilising effect at all in a complicated world of varying and unpredictable time lags . So undergraduates enter their final examinations knowing that economists tend to divide into two camps : the fiscal and activist camp, generally called Keynesian, and the monetary nonactivist camp, generally called Monetarist . The spiritual home of the former is somewhat schizophrenically divided between the two Cambridges (and perhaps New Haven) ; the latter is deeply rooted in Chicago, with some tender offspring in Liverpool and parts of London . Deserters from the Keynesian camp have flocked towards Chicago in the last decade and an increasing number have stopped en route in Pittsburgh . Here they have discovered good theoretical reasons, called `rational expectations', why within an equilibrium framework government activist policies are self defeating . So, conventional economic ideology now asserts first that prices are flexible and markets automatic stabilising devices, and second, that variations in the rate of growth of the money supply are both the proximate and the ultimate cause of vari-

BEHIND THE NEWS ations in the inflation rate (and hence nominal GNP) .' Further if prices are not flexible, so that markets do not work properly, it can only be because of monopolistic influences . Since unemployment (excess supply of labour) is caused by real wages (price of labour) being too high, then if the real wage does not fall it is because trades unions prevent it from falling ; so trades unions must be prevented from acting in ways which maintain too high a real wage . (But an undergraduate examination answer must be wary of becoming too political - politics is a different subject) . Throughout the fifties and sixties it certainly seemed as if full employment was an objective of government policy, and if inflation was perceived as threatening the full utilisation of productive capacity, then full employment could be maintained by the introduction of incomes policies . The only trouble was that the latter either did not work at all, or if they did then the pent-up frustrations released on their demise vitiated the effects they had had . And by the midseventies inflation had reached double digits . A full employment policy was then deemed impossible to put into effect until inflation was brought under control, and this was to be done by controlling the amount of money in the economy . So in 1976 the Callaghan-Healey Labour administration in Britain explicitly subordinated employment policies to the setting of monetary targets ; the reduction of inflation was the major priority, although an incomes policy was also used to try to control wages . (Bourgeois politicians have never been very clear whether the linkage is from the money supply to prices, or from wages to prices ; while their economic advisers talk of the former, they find the latter easier to understand) . From 1979 onwards this policy thrust was sharpened . The Tories abandoned

incomes policy in favour of the more efficacious `trade union reform' and tightened monetary policy considerably . This latter policy centred on the control of `sterling M3' (cash plus positive current and deposit account bank balances), and the `Medium Term Financial Strategy' comprised a series of targets over four years for the steady reduction in the rate of sterling M3 growth . Associated with this was a policy of strict cash limits on all public sector expenditures in order to reduce the budget deficit, or Public Sector Borrowing Requirement (PSBR), as a proportion of output (GDP) . But the Tories have found it very difficult to cut back on major spending programmes . During the election they committed themselves to honouring the Clegg findings on public sector pay comparability in a short-term political manoeuvre running quite counter to their economic philosophy ; defence expenditures increase in cash terms at double the planned rate ; local authorities had partial success in resisting central government pressure to cut current expenditure (and hence jobs), preferring to cut back on (notional) capital expenditure programmes ; large subsidies were paid to British Leyland and funds were provided to buy the miners off ; and escalating unemployment forced up unemployment benefit and social security expenditure . At the same time as expenditures were increasing, tax revenues were falling, partly because of recession (the unemployed no longer pay income tax) and partly because of the `incentive restoring' income tax cuts introduced in Howe's first budget . With expenditures rising and revenues falling faster than anticipated the Government was forced into a massive expansion of its own borrowing to cover the defecit . In order to persuade lenders to part with their money, interest rates had to be increased over and above the already high levels

7

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8 resulting from the attempt to control sterling M3 . (A fall in the supply of money relative to the demand creates excess demand for money, forcing the price of money - the rate of interest up .) . High interest rates had two effects . First, sterling became more attractive for foreigners to hold . International confidence in sterling has been growing since the nadir of 1976 and the IMF stand-by credits, encouraged in turn by the sound monetarism of Callaghan and Healey, the election of the Tories, and the UK's growing oil exports during a period of sharp oil price rises . The increase in the sterling exchange rate depressed the price of imported goods relative to the price of domestically produced goods and increased the price of British exports . While average earnings rose by nearly 21 per cent in 1980 much of the increase in demand was spent on imports, the import-penetration ratios for manufactures and semi-finished goods increased, and domestic manufacturing was severely. depressed . The second effect of high interest rates was that it became very expensive for firms to finance current activities and stocks . In the face of depressed domestic demand, import competition, unprofitable exports, and financial pressures on cash flow positions, a major collapse of manufacturing occurred . Less fortunate firms went bankrupt (there were 4537 company liquidations in England & Wales during 1979 and 6891 in 1980) ; the more fortunate engaged in masssive destocking in order to bolster their cashflow positions ; and unemployment increased dramatically . To a considerable extent the Tories had come to see their mix of economic policies as a mistake by the end of 1980 . First of all, their control over the money supply had been less than a brilliant success ; in 1980-81, for instance, sterling

M3 grew by 18 per cent, as against a target range of between 7 and 11 per cent . In part, this was due to structural changes in the financial system (the ending of the 'corset' restriction upon bank deposits enabled banks to increase their lending and thereby increase sterling M3) . But it was also due to distress borrowing by industry, as firms attempted to maintain cash-flow positions, and to the attractiveness of interest bearing deposits for large wealth holders . Thus the high interest rates which were supposed to control the growth of sterling M3 actually served to stoke the growth rate of the chosen monetary indicator . The second general mistake was to combine a restrictive monetary policy with a loose fiscal policy which drove up interest rates and the exchange rate more than had been intended .

Both mistakes began to be corrected during the course of 1981 . First, the importance of sterling M3 was reduced ; instead of one indicator having primary importance, a range of indicators is now being used ; seen as particularly important are the exchange rate and the general level of interest rates . Here the real rate of interest is what is important, i .e . the nominal interest rate as compared to the present and expected rate of inflation . Secondly, the 1981 and 1982 budgets were fiscally restrictive . In particular in 1981 the burden of direct taxation was substantially increased through a deliberate failure to up-rate tax allowances in line with inflation, and in 1982 national insurance contributions were increased . Matching this increase in taxation (including the introduction of taxation of unemployment benefits) more determined efforts were made to reduce public expenditure . Continued pressure has been exerted on local authorities which has gone some way towards transforming

BEHIND THE NEWS them into bodies whose primary function is mere administration of programmes whose extent has been previously determined by central government . Efforts to reduce government expenditure also involve a quasi-incomes policy in the public sector enforced via cash limits, and continuing price rises in the nationalised industries, in order to reduce their borrowing and dependence on subsidies, both of which figure in the PSBR . The reduction of the size of the public sector, via privatisation wherever possible, also forms part of the strategy . Ideally, as has been much canvassed recently, such privatisation would be stretched to include financing higher education via loans rather than grants and the National Health Service through private insurance rather than general taxation . But it remains to be seen whether the Tories have the political strength to attempt this . As a result of all this, the combination of restrictive monetary policy and loose fiscal policy of 1979-81 has been transformed into the present mix of restrictive monetary policy and restrictive fiscal policy . In the halcyon days of Keynesianism this was called `deflation' . Its intended extent can be gauged from the declared aim of reducing the PSBR from 5 .7 per cent of GDP in 1980-81, to 3 .5 per cent in the current financial year, 2 .75 per cent in 1983-84 and 2 per cent in 1984-85 . There is no doubt that these targets are ambitious . Their realisation would have been helped by a rapid growth in GDP, but by June 1982 the index of manufacturing production had fallen to its lowest level for fifteen years 1 and was still approximately 14 per cent below its level at the time of the last General Election . Not surprisingly severe contraction in i production has been reflected in the unemployment figures . The September 1982 figures show that 3 .34 million or 14 per cent of the working population were

out of work . Adult unemployment 9 (seasonally adjusted and excluding school leavers) stood at 3 .04 million, the highest total since the Second World War . Additionally, government employment and training schemes covered 543,000 people the previous month, keeping total unemployment figures an estimated 315,000 below what they would otherwise have been . But the real situation is even worse : the 1980 General Household Survey showed that in that year 11 per cent of unemployed men and 43 per cent of married women seeking work were not registered as unemployed . Overall 17 per cent of the jobless were not registered with the Department of Employment, either because of ineligibility for benefit or because of the negligible prospects of finding a job . Thus, assuming these figures have changed little, one person in six or 4 million people are currently unemployed . Government spokesmen have frequently said that the underlying trend in unemployment is slowly improving . During the winter of 1980-81 the average monthly increase in unemployment peaked at over 100,000 . This rate of increase slowed throughout 1981 to an average of 13,000 a month between February and April this year . But since the spring the trend has again worsened . In the first quarter of 1982 the rate of increase was 20,000 ; in the second quarter 30,000 ; and in the third quarter 42,000 . To the extent that the Government understands this at all the cause is ascribed to the trades unions ; real wages are too high relative to `our' competitors . The large increase in wages in 1980, combined with the rising exchange rate, meant that UK labour costs per unit of output rose by 55 per cent from 1978 to the end of 1980 compared with the rest of the world ; and despite `the new realism' sweeping the country these costs were

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still 38 per cent above the 1978 level at the end of 1981 . Imports now account for a third of total expenditure, and the trend is upwards . Average annual productivity growth (output per worker hour in manufacturing) has been lower than that in France, West Germany, Italy, the Netherlands, Belgium and Japan by a large margin ; only in the US has it been lower still . In this situation falling real wages and falling inflation rates are held to be the key to restoring the competitive position of British industry ; and falling nominal interest rates, induced by a falling PSBR, are to encourage the revival of investment. So thoughout the summer of 1982, the Government has attempted to slowly reduce short term interest rates (through money market operations) while maintaining the effective exchange rate (measured against a trade weighted basket of currencies) roughly constant . Were the effective exchange rate to fall, import prices would rise precipitating further domestic inflation, as happened in the autumn of 1981 . Short term interest rates have indeed fallen ; wage settlements have been relatively low ; the restructuring of manufacturing industry has seen short run productivity increases ; and the annual inflation rate has steadily fallen from 12 per cent in December 1981 to less than nine percent currently and will perhaps decline to less than 7 per cent by the beginning of 1983 . Yet the prospects for some sort of recovery in output are extremely gloomy . Despite claims that the trough of the recession was reached in spring 1981, despite the Tories' belief that what goes down must come up, despite their disclaimer that although the precise mechanism may not be clear, recovery will happen `naturally, just as day follows night", it just does not seem to be happening . Searching for an explanation Government apologists have adopted the

maxim `when in doubt, blame a foreigner' . The US economy is in recession, the West German economy is depressed, world trade is depressed . More specifically, US interest rates are too high and declining too slowly . The problem lies with the policies being pursued by the Reagan administration, under the tutelage of that well known US government economist, Rosy Scenario .

When Reagan came into office in January 1981 he was full of praise for Conservative economic policies in the UK . But instead of single-mindedly pursuing the goal of lower inflation as a prelude to faster growth, Reagan announced his determination to pursue both goals simultaneously . The virtues of supply-side economics would avoid the more painful repercussions of Thatcher's laudable strategy . The programme had four main ingredients which were seen as mutually reinforcing . First, there were to be sharp cutbacks in the rate of growth of Federal spending - the annual rate of increase of 16 per cent in nominal terms was to be halved . Defence was to escape the axe - and the re-arming of the US is in fact seeing the share of defence spending rising from 24 per cent to 32 per cent of the Federal budget between 1981 and 1984 . Basic social security payments, Medicare and veterans' benefits were also to be excluded on the grounds that they went to the `truly needy' . Facing the axe then were other welfare programmes and various Federal subsidies and regulations supporting the `inefficient' . But this was not enough given the scale of the reduction proposed - so indexation of social security payments remains under threat, although Congress will only allow minor pruning in 1982, an election year . The second element of the programme concerned cuts in direct taxation in both the personal and corporate

BEHIND THE NEWS sectors . Thus the range of marginal taxation on incomes was to be reduced from its January 1981 range of 14 to 70 per cent, to 10 to 50 per cent by January 1984 . In the corporate sector, a new system for writing off the costs of business investment was to be introduced under the self-explanatory title of Accelerated Cost Recovery . This was the real supply-side heart of the programme : the reduction in personal taxation and the increase in depreciation allowances so restoring the incentive to work, save and invest that a balanced Federal budget would be possible by 1984, notwithstanding a lower level of taxation . The third part of the Reagn programme was clear backing for the activities of the Federal Reserve (the 'Fed', the rough US equivalent of the Bank of England) in reducing the rate of growth of the money supply, halving 1980 growth rates by 1986 . The final strand concerned de-regulation : 'excessive' government regulation and report requirements that protected inefficient businesses and 'penalised the efficient' were to be swept away . As detailed by the US Treasury Department, the overall programme was aimed at achieving the following results : (see table) The promised outlook could not have been happier - simultaneous increases in growth and reductions in both inflation and unemployment . Unfortunately, but hardly surprisingly, it was never made clear precisely how this was to be achieved . The supply-side programme was to encourage incentives so that aggregate output would increase . Yet the reduction in demand triggered by eliminating the budget deficit by 1984 would more than outweigh any increase

increase in GNP (1972 prices) increase in consumer price index Unemployment rate :

in demand resulting from tax cuts be- 11 cause of the sheer scale in the cut in the Government's own demand for goods and services, together with the elimination of demand previously financed by axed transfer payments (mainly discretionary welfare payments) . And to the extent that incentives to save worked, demand would fall still further . So supply side economics was to generate an expansion in output, and monetary znd fiscal conservatism was to reduce the demand for output . How was the gap to be filled? The supply-side rejoinder was that investment demand would increase as a result of the stimulating effect of corporate incentives . Yet in quantitative terms the tax cuts were essentially cuts in personal income taxes, and it was not clear how these could have the effect of financing corporate investment- particularly in view of a widespread suspicion that accelerated defence expenditures would quickly mop up spare capacity in the capital goods sector . An alternative answer, also supply-side orientated, was that as the Federal deficit disappeared interest rates would fall quickly and faster than the inflation rate . Declining real interest rates would be the stimulus to corporate investment, private housing expenditure and spending on consumer durables . The problem here was that the Fed was projecting rates of growth of the money supply well below those required to support the administration's desired expansion in money GNP . Either there would have to be an astonishing increase in the velocity of circulation of money (the speed at which money changes hands) or nominal interest rates would have to be much higher for the Fed to 1981 1 .1 11 .1 7 .8

1982 4 .2 8 .3 7 .2

1983 5 .0 6 .2 6 .6

1984 4 .5 5 .5 6 .4

1985 4 .2 4 .7 6 .0

1986 4 .2 4 .2 5 .6

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CSE ANNUAL CONFERENCE 1983 In recent years the annual conferences of the CSE have concentrated on discussions of socialist strategy in Britain . In 1983, we want to continue many of the themes of these discussions, but to emphasize international perspectives . Many of the issues that confront socialists today are worldwide in scope, like the present economic crisis and the threat of nuclear war . At the same time, governments and ruling classes in nearly all countries have adopted policies of economic retrenchment and political repression . To develop an effective socialist response, even in the particular context of any one country, we need to exchange experiences and discuss common strategies . We invite all CSE members and other readers of Capital & Class to come to the 1983 Conference, and to contribute papers . We are particularly looking for contributions which deal with international issues, or analyse parallel developments and experiences between countries ; and we hope that many of our readers from outside Britain will be able to participate . The planning of the conference programme is now under way : please send all offers of papers, suggestions and enquiries to CSE Conference Committee, 25 Horsell Rd ., London N5 1XL . Further information will appear in the next issue of Capital & Class and in the CSE Newsletter .

meet its targets . A third answer was that, since inflation reduced the real value of peoples' monetary assets, a reduction in inflation would mean that people do not need to save as much, and hence a consumer boom would be engineered .' The difficulty here is that Reagan was placing much emphasis on the need to increase savings from their level of less than 5 per cent of post-tax incomes which was low by international standards ; the official projection was for an increase by 1984 to just over 7 per cent . A final possibility was that declining inflation would increase the relative competitiveness of the US economy internationally, and the gap could be closed by rising foreign demand for US exports . But the Reagan administration quickly established its commitment to freely floating exchange rates ; under this regime a relative fall in the US inflation rate would translate simply into a rising exchange rate, with price effects thereby predominating over the required output effects . Twist and turn as one might, there seemed no way that Reagan's economic programme could work from the outset . All that seemed likely, to almost all but the White House, was a reduction in demand and a falling inflation rate : old-fashioned deflation rather than supply-side nirvana . By January 1982 budget deficits of more than $150 billion were being forecast for 1983 and 1984 - the combined result of escalating projections for defence expenditure, actually escalating unemployment and mandatory welfare payments and the projected decline in tax revenue following from the Economic Recovery Act of August 1981 . The immediate outlook for Fiscal 82 (October 81 to September 82) was even worse . In summer 1981 the White House Office of Management and the Budget was forecasting a deficit of $42 .5 billion - by summer 1982 the official forecast had risen to $198 .9 billion . Yet the goal

BEHIND THE NEWS remained a balanced Federal budget by 1984 . Not surprisingly interest rates had by now climbed to record levels relative to inflation and, in a below-the-belt blow to supply-side principles, Reagan was forced to approve a three year $98 .3 billion dollar tax bill in August 1982 . Despite the fact that this was dubbed a tax `reform' rather than a tax increase, little now remained of the plan to cut taxes dramatically, eliminate the deficit entirely and organise the largest ever peacetime increase in real defence spending in US history . During autumn 1982 after tax incomes will have been increased by around $45 billion, partly because of the July round in the original personal tax cut programme and partly because social security pension payments are being increased by 7 .4 per cent . This will stimulate some growth in the US economy, but it will be concentrated in consumer and service sectors . It remains to be seen what will happen to such interest sensitive industries such as cars, capital goods and housebuilding . As economic activity slowly picks up there will be growing demand for bank credit from both private and corporate sectors which will compete with the government's need for credit to finance its deficit in the face of the Fed's restrictive monetary policies . Either interest rates will rise sharply again, choking off any recovery, or the Fed will have to relax its monetary position, which will depend on what is happening to the rate of inflation . The Administration itself believes that savings will rise sufficiently that all credit demands will be satisfied without pressure being imposed upon either monetary targets or interest rates - but Rosy Scenario has little credibility outside the White House . Meanwhile, back in the real economy, the third quarter of 1981 saw the peak of capital expenditures ; capacity utilisation

in US factories is now running at just 13 over 70 per cent ; investment will decline by more than 4 per cent this year, and will probably continue to decline well into 1983 . (This will make next year the fourth depressed year of capital expenditures in a row - machine tool orders fell by 42 per cent in the first quarter of 1982, for example) . Further, import penetration is approaching 20 per cent in passenger cars, steel products, electrical components and farm machinery ; it stands at between 20 and 30 per cent in industrial inorganic chemicals, metal cutting machine tools, food processing machinery and metal forming machine tools ; it has reached nearly 35 per cent in footwear, 45 per cent in textile machinery, and 60 per cent in radio and television receivers . In no sector was it more than 10 per cent during the sixties . Finally unemployment, at 9 .8 per cent in July 1982, is already at the highest level for forty years . From a British standpoint, current developments in the US economy carry a heavy sense of deja vu . Nevertheless, US interest rates have begun to decline . Indeed since mid-July the falls have been dramatic (2 percentage points on long bonds, 3 per cent on prime bank loans, and up to 6 per cent on Treasury Bills) . This development has been encouraged by the Fed, with an accompanying nudge from the Wall St . guru Dr Kaufman of Solomon Brothers, who - reversing his previous prediction triggered a speculative surge by announcing that rates would not rise to new record highs because the real economy was so weak . Since August the real cost of credit in most industrial countries has not in fact been especially high in historical terms . However, it is very high for a period of recession ; it is also high relative to the falling inflation rate induced by deflation and mass unemployment . This means that firms are hardly interested in borrowing for investment today when it

CAPITAL AND CLASS

14 will be cheaper to-morrow . Above all, it is high relative to the very low returns which the private sector is earning on its assets . Thus the UK Chancellor remarked in his last budget statement that : `Since 1960 the real purchasing power of the average citizen has risen by over twothirds, but the real rate of return on capital has fallen by five-sixths' .' This phenomenon is not confined to the UK - it is shared in differing degrees by all the major industrialised economies . So too is increasing unemployment - the OECD forecast had been that unemployment among member states would rise to between 25 and 26 million by mid1982 . By the end of 1981 it had already reached 26 .4 million and the projection for the end of this year is now almost 32 million . The ur .der 25 year olds comprise a 40 per cent and rising share of the jobless, around a third of whom have been registered out of work for a year or more . Last, and generally least considered, there are the 500 million plus unemployed in the Third World . What we have is a major recession on a scale that can only be compared with 1929-33 . In such a situation, the British Government's emphasis on reducing real wages and the US emphasis on constructing incentive mechanisms for improving on an awful productivity record are hardly going to help . In a world recession it makes little sense for everyone to become more competitive with everyone else . Furthermore, the issue is not one of trying to formulate a more efficacious mix of fiscal and monetary policies - it is one of understanding how the mechanisms of inflation and disinflation have been working throughout the seventies and early eighties in order to produce the devalorisation and restructuring currently underway in all the major industrialised economies . Within this framework a subsidiary issue is to understand now how state economic

policy controls the economy but rather the mechanisms whereby the reverse is in fact the case . Marxists have some way to go in this area . At the end of 1982, however, there is little doubt that a fundamentally irrational world will continue to confound and confuse the rational expectations of bourgeois economists and policy makers alike .

Notes 1 . The more theoretically interesting but less practically important nonWalrasian general equilibrium ideas are ignored here . 2 . Leon Brittan, as reported in the Financial Times . 3 . This was Nigel Lawson's explanation of why we should not see the £3 .5 billion increase in taxation in the 1981 UK budget as contractionary . 4 . For a survey of the evidence see S . Hargreaves-Heap in Capital & Class 12, and of the theoretical controversies see J . Weeks in Capital & Class 16 .

Phil Blackburn Ken Green and Sonia Liff

Science and technology in restructuring scientific and technological research and development be redirected towards socialist aims? Our interest in this question led us to examine various political programmes for a transition to socialism, particularly the Alternative Economic Strategy, to see how they deal with such redirection within their other proposed policies . However, despite the importance of scientific and technological research to a programme for socialist industry, health care etc ., mentions of science and technology in these programmes are few and far between . This paper tries to explore the role of science and technology in the current crisis and the issues that have to be addressed if the redirection of research and development is to be given serious consideration in a socialist programme . Recent interest in science and technology by the Left has, for the most part, been an aspect of analyses of the labour process .' These focus on the way scientific and technological changes are used by individual capitals to increase their control over labour in order to intensify work . The process involves 'deskilling', seen as an attack on the autonomy of craft workers, and therefore their power to resist intensification . Such routinisation and standardisation of work, it is argued, lays a basis for Tayloristic and Fordistic techniques of the increased pacing of work, whether by bureaucratic/supervisory or mechanical means in order to increase the intensification of HOW CAN

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CAPITAL AND CLASS labour power, hence increasing the production of surplus value . In a period of crisis, it is clear that these efforts to intensify work will be stepped up . However, what is not clear is the precise role of scientific and technological change within the process of restructuring . We will argue that to confine our interest in scientific and technological changes to the level of the labour process would be to miss the broader, more farreaching changes entailed by restructuring, of which changes at the level of the labour process form only one part .

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Restructuring

We analyse restructuring as a dynamic process of restoring relative stability to capitalist economies . The continued reproduction of the capitalist mode of production needs to be guaranteed by changes in the whole social formation . In the present crisis, capitalist restructuring must confront three major problems if the basis is to be laid for a further sustained period of accumulation (a new upswing in the `long wave') . These problems are : the `crisis of Fordism', the crisis of overproduction/underconsumption and the balance between 'productive' and `unproductive' labour . The crisis of Fordism We derive this idea from the work of Aglietta . 3 He argues that the last sustained period of accumulation (from the 1940s onwards) was based on the diffusion of Fordism throughout the mass production sectors of capitalist economies . The potential surplus value-generating capacity of this form of the labour process crucially depended on the active construction of `economies of scale' . Fordism, therefore, is more than a form of work organisation based on assembly line-paced fragmented tasks carried out by detailed workers ; it has also involved : i) commoditization of the means of consumption . This entailed a transformation of domestic labour processes in such a way as to open up markets for profitable production of consumer goods aimed at the individual household (factory produced clothing, processed food, `white goods', carpets etc .) . Of particular significance in this transformation was the provision from the 1930s of standardised housing and `domestic infrastructure' (gas and electricity) . ii) homogenization of this consumption based around standardised, mass-produced commodities - the classic notion of mass production . The economies which this form of production allow also act to undermine the economic viability of domestically produced alternatives . iii) an extension of these consumption norms to more

SCIENCE AND TECHNOLOGY and more sections of the working class as a result of increased wages gained through collective bargaining, the growth of the social wage, and the extension of facilities for consumer credit . The present crisis is, therefore, the result of a combination of factors which might be summed up as 'the limits to Fordism' . These include : the resistance of workers to Fordist work organisation (through increased absenteeism, turnover, strikes, sabotage etc .) ; limits to the commodization of consumption (due to the labour intensive nature of service work in medicine, education, administration etc .) ; diminishing productivity returns from ever increasing requirements for fixed capital, particularly in 'maturing' industries, with rapidly rising costs of energy and raw materials ; and the costs of distribution over the large markets required by Fordist production . The crisis of overproduction/underconsumption

The declining rate of profit in manufacturing industry due to the limitations of Fordism has been exacerbated by the attempts of individual capitals and, latterly, state-imposed wage restraint policies, to lower real wage increases . In addition to the hardship which low wages imposes on a sizeable proportion of the working class such actions have led to a general crisis of demand deficiency and overcapacity . These exist simultaneously as individual capitals attempt to maintain accumulation or, as the crisis deepens, even to maintain the value of their capital by decreasing their wage costs . Real wage cuts, followed by labour shedding, occur as individual capitals pursue their own short term interests . The balance between `unproductive' and `productive' labour

While its precise role is contentious, most Marxist writers agree that the growth of the state sector, being underwritten by taxation of surplus value, has acted to exacerbate the crisis in accumulation from the late 1960s onwards . A growing labour intensive service sector was originally beneficial to capital because it supplies pre-requisites to accumulation : socialised health and education for the assured reproduction of labour power ; systems of social control ; the re-distribution of wealth ensuring the maintenance of effective demand ; the maintenance of infrastructural services (in transport, energy and communication) . However, the balance between these indirect benefits to accumulation which 'unproductive' labour contributes to capital and the total costs which this increasing 'social wage' inflicts on capital's accumulation tips towards the latter as accumulation slows down . C&C 78 - B

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Given the extent of the crisis, the process of capitalist restructuring, if it were to be successful, would have to overcome these complex and inter-related barriers to accumulation . One thing is clear ; although the crisis is perceived by capital as a crisis of the economy, the resolution of the crisis is not possible solely at this level . Restructuring must involve wholesale social changes at the cultural, political and economic levels . What particular options capital, either as individual units or via state agencies, chooses to pursue is problematic . Given the uncertainties and contradictions which exist, furthermore, there will be different constraints on state action in different countries . As such, a functionalist approach to restructuring which analyses state policies in terms of the pursuit of an unambiguous plan of restructuring is inappropriate . Such an account would relegate political action to a resistive role, ignoring the strongly positive role played by reformist social democratic parties after the last slump . A restructuring successful for capital is more likely to take place in Britain as a result of some historical combination of Tory monetarism and reflationary social democratic strategy rather than either of these forming a successful restructuring strategy on its own . It is quite easy to envisage some versions of the Alternative Economic Strategy being implemented by a Left government as the expansionary phase of capitalist restructuring (particularly if it has popular appeal as an alternative to the austerity of monetarism) without changing the organisation of production and consumption sufficiently to favour increased control by a mobilised working class . One of the political implications of this view, then, is the need for Left political programmes (like the AES) to take the broader process of restructuring seriously as a problem when starting from a strategy based on Keynesian reflation .

Science and Technology in restructuring production

There are four main areas of scientific and technological development which are currently receiving high priority worldwide from capitalist firms and states - microelectronics and associated technologies, information technologies, biotechnologies and energy and materials technologies . Details of these technologies are to be found in the appendix to this paper . We should emphasise then, that although 'microelectronics' is receiving considerable attention and is the subject of great interest on the Left,' it is not the only technology that requires consideration . There are several major ways in which scientific and technological developments may affect capitalist production



SCIENCE AND TECHNOLOGY and may circumvent barriers to accumulation . These are : a) Economising on constant capital - saving on the use of energy, raw materials, components and machinery . This will either be at the individual enterprise level (eg . cheaper metals and machines) or at the level of national capital (eg . cheaper grid energy) . Savings must also be conceived in relation to the different parts of the collective worker : savings in execution (eg . new micro-based machines) and in conception (new office and management information technologies) . It is particularly important here to consider the relations between the capital goods (Department 1) and consumer goods (Department 2) sectors . A massive cheapening of the commodities produced in Department 1 has considerable effects in both Departments 1 and 2 by cheapening fixed capital and thus reducing the value of consumption goods and hence the value of labour power overall . Robot assembly of machinery and the use of computer aids to design and management - especially in the area of small batch production - are crucially important here . In addition, the cheapening of constant capital in total (by using new machines and new energy, materials and information technologies) and the speed-up of turnover time (by the use of information technologies in the financial sectors) will cheapen commodities and labour power in both Departments and will raise the production of relative surplus value and offset the effects of increased organic composition of capital . (b) Economising on labour power - this includes altering skill structures or reducing the total number of workers so as to reduce the overall value of the collective workers' labour power . This is not reducible to 'deskilling' but may be achieved by : i) altering the product (fewer components) . ii) altering the process (lower skills required) . iii) increasing the possibilities for concentration of production and associated services, leading to economy through 'rationalisation' . iv) reducing the porosity of the working day . (c) Economising on constant capital and on labour power may not occur in isolation but will often be combined so as to offer radically new techniques of production allowing : i) integration of previously separated processes . ii) removal of 'restrictive practices' . iii) increased mobility of manufacturing, regionally or internationally . iv) increased shiftwork . v) increased opportunities for 'self-regulation' (eg . autonomous workgroups, contract labour) .

19



CAPITAL AND CLASS (d) Economising on the time taken to realise the value of the product - either by better transport systems (eg . new energy saving technologies), by better distribution systems (automated warehousing) or more efficient banking systems (computerisation) and better communication systems (information technologies) . The recent debates on restructuring have not only added to this list of where technology `fits in' but have also led to a reassessment of the significance of the state . They have emphasised that its role is not merely one of repressive support for capital : the state has an interventionist role in supporting new technologies in their development phases and in restructuring labour power and its reproduction by re-organising state institutions for education and training, health care and social services (thus affecting household arrangements and family structures) . The role of the state in subsidising research and development and in formulating appropriate procurement and investment policies to stimulate suitable industries, needs to be explored before any view of the longer term nature of capital's strategies in these areas can be formed . Given the enormous potential for new infrastructures that new technologies provide (eg . system X, fibre optics, satellite/cable TV) the state's role is particularly important . The state also has a role in `trying out' new forms of labour organisation - in the defence and atomic

20



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SCIENCE AND TECHNOLOGY

21

industries in particular - which act as models for other industries .' In the case of information technologies, these offer the possibilities of fundamental changes in all industries responsible for the generation, transmission and reception of print and visual images . As such they are particularly appropriate to the automation of the labour-intensive service sector . Where this white-collar work is funded by state expenditure, labour displacing information technologies form a technological arsenal to attack the growth of unproductive labour . However, like the other new technologies described in the appendix, the potential increases in productiveness which information technologies can offer to capital cannot be realised to more than a limited extent without wholesale transformations in the forms, nature and provision of those services . Strategies of capital which focus on the supply of machinery and of infrastructure are not the only ones that need some exploration . We will go on to describe possible capitalist processes of transformation in the next section .

We need to try to relate what is going on in the commodity production sphere, where capitals are re-organising and attacking labour organisation, with what is going on in other spheres . In particular we need to consider the sphere of subsistence where commodities are being purchased, consumed and utilised to regenerate labour power and labourers themselves . Usually and quite correctly, emphasis is put on how capital tries to counteract the falling rate of profit by attempting to redress the balance between itself and organised labour . This is usually described in terms of `point of production' class struggles where industrial capital and industrial labour power contest over redundancies, work-place organisation and wage levels . However, capitalist production processes, as well as being labour processes for the production of exchange value, are also labour processes for the production of use values . These are concrete goods and services which are physically consumed either in other capitalist production processes or by the non-capitalist sector or by individual labourers . Restructuring then cannot just be about the restructuring of the capitalist commodity production process, narrowly conceived, nor about the rationalisation of different industrial sectors and their geographical relocation . There must also be some restructuring of consumption, of the means of subsistence . The rate of profit can be restored by altering the relations between labour and capital in production only so long as the `consumers' are prepared (or

Restructuring of Consumption

CAPITAL AND CLASS

22

made prepared through the restructuring of choices and the basis on which these are made) to purchase the goods and services made available . So the commodities produced in capitalist labour processes must therefore be use values which satisfy the requirement of some consumer, as well as being exchange value to satisfy capital . Although obvious, the significance of capitalist labour processes as use value producing processes is often ignored . Human beings have physiologically and socially determined needs for food, drink, for covering, for shelter, for tools, for cultural and social inter-action, for leisure and mobility, for care of infants, the sick and the old . There is, however, an infinite number of forms in which these needs can be expressed and satisfied . Marxists have always maintained that the specific use values that satisfy them are historically contingent . The need for food, for example, says nothing about the particular foods, cooking requirements, or social arrangements of food growing, of distribution, preparation and consumption which are historically observed, and which are determined not only by availability but by prevalent techniques, economic structures and household arrangements . But capital is not indifferent to these historical determinations . Capitalist firms, by advertising and offering credit facilities to customers, nowadays create demand, by organising consumers' needs in ways towards which their profitable commodities can be directed . The history of industry in the 1930s (particularly the American automobile industry), as Aglietta shows, is a graphic example of this . American requirements for transport, accentuated by the particular development of US urbanisation, were directed and channelled into private car consumption, the purchase of which was closely tied to the radical re-organisation of component production and assembly introduced by Ford and elaborated by Sloan of General Motors to provide a strategic route for solving the crisis of the 1930s . So the close connections which exist between on the one hand the extension of capitalist relations of production and their continued reproduction as aspects of the accumulation process, and, on the other, the structure of consumption of the working class, cannot be stressed too much . As Aglietta describes it, writing about the US of the 1930s : The separation of workers from the means of production that is the origin of the wage relation beings about a destruction of the various modes of traditional consumption and leads to the creation of a mode of consumption specific to capitalism . A social norm of working class consumption is formed, which becomes an essential

SCIENCE AND TECHNOLOGY determinant of the extension of the wage relation, as a fundamental modality of relative, surplus value . Through the social consumption norm the mode of consumption is integrated into the condition of production ." For our analysis, the crucial idea is that continued reproduction of capitalist relations of production (the preservation of wage labour) does not just depend on altering those relations within the factory, which a narrow labour process perspective might suppose ; it requires alterations in the mode of consumption of the working class to confirm its subordinate position in the wage labour-capital relationship more tightly than before . The focus on reproduction and accumulation must thus make some sense of the changed structure of working class consumption . Further accumulation depends on changed patterns of working class consumption compatible with new relations and processes . The crisis may be one of accumulation and its principal aspect may be the power of labour built on the successes of the previous boom, but, insofar as capital labour relations need to be restructured, such restructuring cannot just imply each capital getting control over its own labour force so as to extract more surplus value . The patterns of use value consumption of the working class as a whole may also be in need of transformation . The 1930s and the 1940s were a period of substantial restructuring in the consumption sphere - the period comprised a combination of Keynesianism, the collectivisation and extension of the welfare system, unprecedented infrastructural provision, the rapid fall in the cost of consumption products presaged by Fordism and the, by now, general use of electric powered machinery for cheaper machine making . What about the 1980s and 1990s? What approaches to viewing capital's long-term strategy for consumption restructuring are there? Aglietta focusses attention on the production of collectively consumed use values, economies in the provision of which he sees as necessary to reduce the value of the social reproduction of labour power, as a major strategic requirement for the preservation of the wage relation . The conditions of accumulation can only be re-established by a fundamental restructuring of that wide variety of services which come under the heading of social welfare . These must be, in some fashion, reorganised so as to reduce the price of the service commodities they provide ; this will lower the value of labour power sufficiently to allow a higher rate of surplus value to be gained in both Departments 1 and 2 . The reorganisation of these services, argues Aglietta, will involve major transformations of the labour processes that provide them . He calls the necessary

23

CAPITAL AND CLASS

24

transformation 'neo-Fordism' ('a major revolutionisation of the labour process that tends to replace the mechanical principle of fragmented labour disciplined by hierarchical direction with the informational principle of work organised in semiautonomous groups disciplined by the direct constraint of production itself')' all based on the further extension of automation and computerisation - in short information technologies applied to health care, education, personal social services, public transport etc . From this perspective then, and focussing on the wider range of anticipated technological developments that we are dealing with here, technological changes in health care (various bio-technologies), education (various information technologies), in pollution control and health and safety (both bio-technologies and information technologies), in transport (new energy technologies) can only be seen as `appropriate' for capital if they can be integrated with the strategic requirement we have referred to . It is clear that such developments as computerised diagnostic services can cheapen some skilled medical services, that new bio-technologies can cheapen the cost of drugs, that sophisticated interactive teaching machines can increase teachers' productivity ; but, as we have tried to emphasise, these labour process changes do not exhaust the potential of new technologies . New service commodities are also possible . Whereas it might be too ambitious to see spare part surgery and in vitro fertilisation as major new service use values establishing completely new consumption patterns (at least in the medium term future) this might not be the case with, say, education use values . One might see educational services going the same way as say public transport did in mid-century USA, following `self-service' paths .' Private manufacturing capital, utilising the potential of information and communication technology, can offer commodities for sale and substitute part of some currently offered public service . For example there is a potential market for home computer education kits, initially perhaps supplementing only adult education classes or children's books and games ; but there may be a future for a more extensive invasion of the public education system - with local education institutes and hardware/software manufacturers offering educational and training packages for home use . In short, the restructuring of social welfare service consumption may involve the privatising of collective consumption . Such a strategy - effectively involving the introduction of new microelectronically-based products ('the video age') - requires a consideration of potential state initiatives in establishing such

SCIENCE AND TECHNOLOGY things as effective regulation of satellite communications, accustoming children to computer systems, encouraging the state sector itself to utilise new communication technologies to provide a demonstration effect, and so on .

To sum up, capital's strategic requirement to economise on the production of the services necessary for the reproduction of labour power could be achieved by some combination of two methods : a) within the public sector, increased use of more productive capital goods (teaching machines, medical equipment) though with some use of sub-contracting of labour intensive services to private capital . b) the by-passing of state-provided services by establishing new consumer patterns based on individual consumption (privatisation) or new micro-based and bio-based use values . The extent to which these two `scenarios' might be realised does not depend on the technological developments themselves . What happens will crucially depend on the political struggles that take place within the public sector where most welfare services are provided . Will we see an extension and substantial rationalisation of the nascent two-tier system of services provision, as now exists in terms of private medicine/ schooling, with limited `safety net' facilities ensured by a run down public sector? For some sectors, in some countries (eg . health care in the USA) it is conceivable that an entire `welfare branch' can be subjected to the changes required . It seems likely that those aspects of existing health care which are not readily 'technologisable' will be left up to the safety net or pushed back to `households' or the `community' ; while those forms of medicine most easily performed and most linked with the production of surplus value (that is, not the old and chronically sick) will be the site of fundamental restructuring . In other countries, however, where the service is state pro-

25

The restructuring of water production and consumption : health care and education to follow?



CAPITAL AND CLASS vided, how will restructuring take place? Through state encouragement of privatisation? It is worth pointing out that there are real contradictions within a restructuring policy which does not tackle the wider aspects of welfare care . A `return to the community' policy will imply that many women (given the current domestic division of labour) who have been undertaking waged work in these, or other sectors, would have to return to unwaged domestic work . This would happen through the contraction of job opportunities, the inability of voluntary services to cope and the incompatibility of extended domestic work with current working conditions . Since this would imply a drop in household income it is difficult to see this as wholly compatible with restructuring aimed at raising consumption norms .

26

Science, Technology and oppositional strategies

So far our discussion of restructuring has concentrated on assessing the characteristics of the crisis and on providing means to better interpret capital's strategies . We feel that it is also important to consider how labour can struggle, not merely to react to the more extreme effects of the process of restructuring currently underway but to change the direction of the restructuring of capital-labour relations towards the interests of labour . We want to consider some of the problems faced by the working class both in its position as producer and consumer by the scientific and technological aspects of restructuring . We think that the foregoing description of the restructuring debate has emphasised one of the novel features of this debate, namely, its successful attempt to breach the theoretical divisions between the analyses of production and consumption : we intend to indicate some possible implications of this for strategists of class struggle . Again, in line with our attempt to broaden out the debate around science and technology we do not intend to put emphasis solely on traditional `point of production' strategies . There are a number of reasons for this . The first group of reasons refers to the appropriateness of craft-based struggles to the changes going on . We would argue that there are a number of factors in the current situation which undermine these strategies . The most important of these are : the possibility that 'deskilling' will occur not through a) direct confrontation with craft workers but rather through unemployment followed by the introduction of new employment often using different sections of labour (women, workers in different geographical locations etc . ) ; that the service sector, where many changes can be exb)

SCIENCE AND TECHNOLOGY pected, have no craft union traditions ; that the expertise required to contest change of a subc) stantial technological kind is concentrated in technical workers who, while becoming more unionised in recent years, have generally failed to ally themselves to broader working class movements . The second set of objections to concentrating on craft strategies refer to their sectarian nature . Strategies for controlling labour supply through, for example, apprenticeships and closed shops with restricted conditions of access, or for ensuring a supply of work through, for example, demarcation, has succeeded but at the expense of less well organised sections of labour . 9 Many Left analyses have failed to take seriously the real differences of interests between sections of the working class . We feel that the way to tackle this is to concentrate on new forms of democratic decision-making within which these differences can be resolved rather than concentrating on further developing competitive strategies . Finally, in view of the radical cross-sectoral implications of the new technologies, we would argue that it is impossible to pose successful oppositional strategies at the level of occupational group or, often, even at the level of a particular firm or industry . One of the most innovative political developments of recent years has been the emergence of workers' plans within large firms in particular industries . This type of strategy emphasises wide grass roots involvement in the construction of alternative corporate plans . The plans incorporate alternative decision-making criteria in the design of products, organisation of production and R&D policy which are oriented to the provision for social need, democratic control of production and participation in choices associated with the process of research and development . The joint Trade Councils' publication State Intervention in Industry 10 has suggested ways of extending the sort of plans associated with shop stewards' movements in Lucas Aerospace and Vickers . Using local trades councils as a base, they argue that the involvement of community groups, women's groups, anti-racist organisations, the organisations of the unemployed, pensioners groups, constituency Labour parties and other socialist organisations would allow wider participation in the construction of the policies for social need than would plans constructed from within individual firms . While supporting such suggestions, there are problems to face in the case of many mature industries where research is not carried out so intensively as in younger, high technology industries . In many of these firms R&D as such is actually

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CAPITAL AND CLASS

Contributions to Political Economy EDITED BY John Eatwell Murray Milgate Giancarlo de Vivo Contributions to Political Economy

Cambridge journal of Economics

Publication : Quarterly Publication : One issue per year (March) Subscription : Volume 1, 1982 Subscription : Volume 6, 1982 (overseas) Full Rate : £22 .00 (UK) / $ 58 .00 (overseas) Full Rate : f7 .50 (UK) / $ 20 .00 *Personal Rate : £6 .00 (U K)/$16 .00 (overseas) *Personal Rate : £12 .00 (U K) / $29 .00 (overseas) Combined subscription rate for Cambridge Journal of Economics and Contributions to Political Economy Full Rate : £2730 (U K) / $72 .00 (overseas) *Personal Rate : £16 .50 (UK) / $44 .50 (overseas) *Personal subscription rates are available only on orders placed directly with the Publisher and paid for out of personal funds Contributions to Politcal Economy publishes articles on the theory and history of political economy . Articles will fall broadly within the critical traditions in economic thought associated with the work of the classical political economists, Marx, Keynes and Sraffa . In addition to articles, Contributions will review the more important books published in the preceding year the subject matter of which is within its scope . Contributions will appear annually in March, and can be obtained either by means of a joint subscription with the Cambridge journal of Economics or separately . All communications (including books for review) should be addressed to : The Editors, Contributions to Political Economy, The Marshall Library, Sidgwick Avenue, Cambridge, CB3 9DD, England .

Contents R . Tarling and F . Wilkinson : The movement of real wages and the development of collective bargaining in the U .K . : 1855-1920 D .J . Harris : Structural change and economic growth . A review article J . Robinson : The current state of economics P . Groenewegen : Thomas De Quincey : 'Faithful disciple of Ricardo?' R . Green : Money, output and inflation in classical economics G . de Vivo : Notes on Marx's critique of Ricardo Published for the Cambridge Political Economy Society by Academic Press

Academic Press

A Subsidiary of Harcourt Brace Jovanovich, Publishers London New York Toronto Sydney San Francisco 24-28 Oval Road, London NW1 7DX, England 111 Fifth Avenue, New York, NY 10003, USA

SCIENCE AND TECHNOLOGY carried out in the firms of their capital goods suppliers, many of which may be foreign based or owned . They may, in fact, be used to being hit by R&D in the form of new technology rather than having the advantage of in-house R&D work which is more accessible to intervention . This implies the need for a wider framework of struggle uniting work and communitybased organisations and involving state action at local and national levels . We would therefore see it as important to look again at transitional strategies to see how they can deal with questions of science and technology and how far they can incorporate democratic decision making . What we intend to do is to take the example of the labour movement's Alternative Economic Strategy" and follow through some of the implications of our analysis . The feature of the AES on which it seems appropriate to concentrate is that of planning agreements . It is through this system the decisions are to be made regarding the quantity and variety of products and services . If substantial restructuring is on the agenda, with major changes in consumption as well as in production made likely by new technologies, then it is important to be aware of the range of choices with which such planning agreements would have to deal - the design and nature of products, investment in new processes, research and development policies and the possibilities for developing new working practices . The cross-sectoral complexity of these choices inevitably required state involvement and action . There are in existence a large number of mechanisms whereby the state can intervene in the decisions of the sort planning agreements would have to deal with . As far as science and technology are concerned, intervention of the State level has taken several forms . Firstly, regulatory activity - this takes place usually by a form of licensing on the part of the state after a new product (or occasionally process) has come into existence (examples here include regulation of drugs, adherence to technical standards, control of health and safety) . The limitation of this form of control is of course that it is a negative one, that is it can only `ban' particular products after they have come into existence, although indirectly it may also have the effect of dampening innovation and research in particular areas . Secondly, in some areas the state has acted as the sponsor of new technology . This has been particularly important to the military sector . However, it has also become increasingly important in areas where the scale of production and therefore the effects on an economy are large, eg . aerospace, and steel . State-industry partnerships have been formed as a means of protecting these

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national key sectors from the effects of world competition . Forms of periodic restructuring of industries and sectors have also been carried out by the state (usually by nationalisation) due to their strategic or economic importance . Such intervention is already being extended in OECD countries as a technological part of counter-cyclical economic policies . 12 This has been described as `backing winners' and involves making deliberate choices to channel state investment into specific projects for the development of new industries or sectors based on developments and innovations in science and technology . `Winners' here, of course, refer to particular industries or sectors based on infant or emergent technologies likely to be important in world markets . Potential `winners' include biotechnology, office automation, robotics, marine technology, microelectronic components . The intention in discussing these existing forms of state intervention is not, of course, to suggest that we can spot `socialist winners' as much as to point out the availability of various mechanisms for directing science and technology at the level of the state . These mechanisms may prove useful to a Left government, either in their present form or after substantial democratisation to allow intervention in the process of restructuring now taking place, redirecting scientific research and technological development towards socialist relations of production and consumption . Forms of state regulation and sponsorship may be further augmented by politically-motivated state procurement policies which would act to favour particular social criteria of utility . We might see a preference given to such things as : products with low energy needs, suppliers using co-operative production organisation, or computer-based capital goods with skill-enhancing software . The development and use of such techniques would, by contesting capital's ability to structure markets, begin to challenge market criteria of resource allocation in production and open up space at lower levels for the extension of workers' control over both the products and the organisation of production . In addition to state bodies there are a number of semistate bodies associated with particular sectors of production which could form a starting point for intervention in research and development, encouraging the diffusion of new technologies, organising retraining schemes and providing technological information for particular industries . Little Neddies, research associations and Industrial Training Boards could be made more accountable, being given the role of assisting in the construction of workers' plans, assembling information on the availability and experience of using new

SCIENCE AND TECHNOLOGY techniques of production, of democratic organisation and of occupational hazards . This could begin to break down the divisions between technical and manual workers and the ability of management to appropriate and direct technical expertise . Integrating production and consumption Of course we are well aware of the political arguments against a naive utilisation of existing state institutions and mechanisms for socialist ends ; so we would insist on the necessity of democratisation of such institutions as a central part of any alternative political strategy . But there is a further, more substantial political issue that is, in effect, the `novel' subject matter of this paper . All these existing forms have a tendency to deal with production in isolation from consumption . The state as consumer does influence production as discussed above and workers's plans do have the potential to involve consumers . However, the orthodoxy has been to leave consumer influence to the market . It is assumed that they have their say by `choosing' to buy or not to buy a particular product . However, as we have argued this is obviously a structured choice based on price, marketing and availability, to say nothing of monopoly provisions where the consumer has virtually no influence . For example, electricity consumers can only influence the form of production indirectly through their parliamentary representatives . In order to prioritise social need, it is crucial that we find ways of involving direct consumers and those who live in areas which will be affected by industrial development . Aaronovich discusses the potential for the development of democratised local and regional planning authorities ." This could provide a useful starting point for greater involvement in specific and technological decision making . However much work needs to be done to develop structures through which different levels of planning may be co-ordinated . While the validity of consumer involvement in industry has yet to gain general acceptance, the approach within the `welfare state' sectors is rather different . While bodies like Community Health Councils and parent-teacher associations are often far from models of grass roots democracy, their existence is significant as a recognition of the need to combine the views of consumers and `producers' . `Fight back' campaigns over welfare cuts suggest that workers and consumers are far more likely to see common interest here than is the case in most disputes over industrial closures . Furthermore, the establishment of health, education and other social provisions within the state rather than the private sector was based on a

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prioritization of social need rather than profit . These sectors, therefore, appear to present greater opportunities to raise questions of the redirection of planning within democratic forms than market-oriented sectors such as manufacturing . While there is a tendency to separate out social and economic policies they are inter-related in complex ways . Changes in educational provision over science and technology could give people a better basis from which to assess decisionmaking in those areas . Child care facilities and provisions for the care of the chronically sick, disabled and elderly are vital in enabling women both to go to work and gain access to a wider range of jobs . Apart from those effects on the workforce, the state sector obviously has a massive influence on the private sector in terms of purchasing policy . These factors are important since they indicate significant ways in which the state sector can affect democratisation in the private sector . This is crucial in the context of relatively slow change in a mixed economy as proposed by the AES . Although the state sector appears to have potential for democratic change it also presents significant difficulties . There are moves towards privatisation in all areas of the welfare state and an increasing emphasis on high technology capital goods in the health and education sectors . In addition, these areas are dominated by professional groups which traditionally have been resistant to accountability or sharing expertise . All these issues represent serious problems for attempts to democratise scientific and technological decision-making in the state sector . This leads us back to the problems of how to incorporate forms of democratic decision making over such choices into a planning system . It may be that multitudinous references to `workers control' within an AES refer to a mechanism for changing the existing relations of production . However, it seems to us the use of the term has a rhetorical ring about it and serves as an embellishment rather than a central component of the strategy . Consideration is rarely given to the forms of worker's control, the level on which they should operate (firm, sectorial, state) or to ways of extending control to consumers or community groups affected by planning decisions . We think it is insufficient for planning to take the form of a consultative structure unless strong measures are taken to ensure parity between the parties involved in the planning process . This must involve some independent means by which groups can contest expertise (whether technical or managerial) assumed by management . If some ultimate form of managerial decision making remains, such participation and consultation could only be considered democratic if a broad consensus of views

SCIENCE

exists, otherwise one has to specify whose views are to be taken most notice of. It is obvious that conflicts will emerge in many areas . Nuclear energy workers and miners are likely to disagree over a workers' plan for energy . Steel workers' and car workers' idea of a transport plan is likely to differ from those of Friends of the Earth . Unskilled women workers may disagree with male craft workers in the same industry over priorities for changes in working practices . 15 Consumer groups may conflict with producer groups over import controls which may support home industries but raise prices . These examples could be multiplied endlessly yet few of those who enthusiastically endorse `democratic control' have been prepared to face up to such potential areas of conflict . The problem of expertise is a complex one to which careful thought must be given . One critical question is the effect of the division of labour on the development of workers plans . The internal `knowledge economy' of capitalist relations of production is such as to disenfranchise many detail workers on the shop floor from participation in the conceptual and skilled work of white collar and technical workers . This applies especially to the 'unskilled/semi-skilled' workers who have been used to populate labour intensive segments of massproduction industries . This applies particularly to women, working often on a part-time or even full-time basis in addition to domestic and child care labour which is demanded of them . `Democratisation of the workplace' or `workers' control' is not possible without beginning to confront such issues . Furthermore, the technical division of labour itself has involved a privileging of these technical and managerial workers, often on sexual and racial lines, which is likely to be a significant factor often overlooked in discussions of the process of democratic determination of social need . Essentially what we have to confront is the narrow technocratic and top-down mode in which many social programmes are formulated . If we are to support the AES we are committing ourselves to a continual struggle to flesh out its strategies by pulling them down from the level of the state and tying them into local and grass roots organisation (multiple mixed metaphors notwithstanding!) . This struggle must go beyond the usual call to consult with the usual list of groups representing women, blacks, environmentalists etc . Instead it must be prepared to develop models such as joint shop stewards committees and community centres as forums within which differences can be raised and broadlybased policies developed . While we feel these problems are extremely important and have been insufficiently considered in the past we want to C5C

is -

C

AND

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CAPITAL AND CLASS end by stressing the positive possibilities offered by a reassessment of the role of science and technology within socialist strategies . As far as radical critiques of science and technology are concerned the advances of contemporary thinking in this area have been to stress the qualitative aspects of science and technology ; thus to talk about more science and technology, more research and development investment, is as limited as suggesting that the problem of the National Health Service is purely one of lack of finance! It is not just a case of trying to achieve a redistribution of investment or state expenditure, nor an extension of nationalisation, but an attempt to affect the quality of health not just the quantity of medicine . Similarly, the quality of production is not measured purely in terms of the levels of productivity, investment or R&D but in terms of the type of goods produced for what social needs, in what sort of productive arrangements - division of labour, conditions of work, relations of accountability, control of expertise, distribution of skills and the like . Thus we feel that to concentrate solely on the role of technical change in creating 'deskilled' jobs and unemployment would be short sighted . Scientific and technical change can provide new use values and vast productivity gains which, at least potentially, could provide gains for the working class . These gains will only come about if we struggle to find forms of organisation which will allow democratic decision making over both the design of new use values and the relations of the distribution of wealth . A number of groups, particularly those working around questions of energy and of health are beginning to do this . But it is critical that union strategies and more broadly based economic strategies also begin to confront these questions .

34

Appendix : Chips, Satellites, Bugs, Spare Parts, Windmills and Nodules

These are the areas of scientific research and technological development receiving high priority world-wide : 16 `Chips'

Microelectronics and associated technologies - this includes the development of the silicon chip itself (increasing its power, simplifying the programming of it to reduce the high costs of software) and its application to a huge variety of consumer products, particularly electronic ones like TV accessories and home computers . Microelectronics components are also being incorporated into machinery for use in metalworking industries (in welding, forming, painting and assemt ling mass-produced and small batch goods) as well as into other

SCIENCE AND TECHNOLOGY industries which involve routine packing activities or simple materials handling (robotics is particularly important here) . `Satellites'

Information technologies - this includes the development of new computers, new transmission systems (including lasers, optical fibres, satellites, electronic telecommunications systems) for the manipulation, storage, transmission and retrieval of the spoken and written word as well as of drawings and pictures . These are being developed in a wide variety of industries and services - office work, professional services, post and telecommunications, printing and publishing . Different aspects of labour processes can be linked together through the computerisation of design, draughting, production planning and production control using computer-aided design (CAD) and computer-aided management (CAM) . This allows greater integration of conception and execution linking with machinery developments mentioned above . It leads to such new production methods as computerised numerical control of machine tools (CNC), and flexible manufacturing systems (FMS) . There are also new methods of distribution of goods (automated warehousing, computerised retailing) and of financial information (an extension of computerised banking and insurance services) ; additionally, there is the development of technologies to provide general information of interest to both business and individual consumers (viewdata, cable TV) and last, but certainly not least, to the military and state (such as computerised personal records) . `Bugs'

Biotechnologies - considerable research is underway into new techniques for the manufacture of drugs, as well as synthetic fibres, fertilisers, raw foodstuffs and synthetic fuels . This research involves genetic engineering of biological material and, more especially, the systematic use of biological materials to assist chemical processes ; the material is produced by selective breeding of micro-organisms or new cloning techniques . `Spare Parts'

There are rapid advances in techniques of human body engineering (organ replacement) and of obstetrics (test-tube fertilisation) though, in the medium-term developments in reproductive techniques are likely to have the most economic significance for animal breeding .

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36

Energy and materials technologies - there is continuing research into nuclear power (towards fast breeders and fusion) ; increased research on energy and raw materials to be obtained from coal, and into renewable sources of energy such as solar, wind, ocean, thermal, biomass . Research into conservation technologies is linked to the use of microelectronics for better process control which can reduce energy usage in industry and in transport . Research in materials conservation involves exploring the potential of complexes of inorganic and organic materials ; there is considerable development in obtaining materials from difficult terrains, particularly from the sea bed (manganese nodules, deep sea oil drilling) .

Notes

A shorter version of the first three sections of this paper was presented at CSE Annual Conference, 1981 . A version of the last section was presented at a meeting of the Group for Alternative Science and Technology Strategies of which we are members . We would like to acknowledge the valuable comments and criticisms of GASTS members as well as those of members of the CSE Restructuring Group and of Capital and Class Editorial Board . 1. See, for example, Andrew Zimbalist (ed.) Case Studies in the Labour Process (Monthly Review Press, 1980) ; Les Levidow and Bob Young (eds .), Science, Technology and the Labour Process Volume 1 (CSE Books, 1981) ; Mike Hales, Living Thinkwork: Where do labour processes come from? (CSE Books, 1980) . 2.

See Sam Aaronovitch and Ron Smith, The Political Economy of British Capitalism (McGraw-Hill, 1981) Chapters 12 and 13 and the books etc . referred to in those chapters . Michel Aglietta, A Theory of Capitalist Regulation : the US Experience (New Left Books, 1979) 3.

4. There have been many analyses of `new technology' (usually taken to mean microelectronics and information technologies) by labour movement and socialist organisations . See, in particular, CSE Microelectronics Group, Microelectronics : Capitalist Technology and the Working Class (CSE Books, 1980) ; Ursula Huws, Your Job in the eighties : A Woman's Guide to New Technology (Pluto Press, 1982) . Despite its obvious importance we are not able to include in our 5. analysis a discussion of the role of military technological development in restructuring . Though we should note that it is not sufficient to see the `spin-off from state-supported military research merely in terms of the specific products and technical processes which are generated . There are a number of examples of spin-offs in the forms of organisation of labour process as well whose significance needs to be explored, For example : According to Phillip Kraft the forms of organisation developed to program and operate computers (in particular specific



SCIENCE AND TECHNOLOGY types of sexual division of labour) have their origins in the US military interest in the computer industry as part of Korean war effort . Also, according to David Noble the general use of NC machine tools, as machines which more readily permit a mental/manual division (a division not present in rival contemporary machines equally technically efficient), was only made possible when the US airforce decided to purchase such machines for use by its subcontractors in the mid 1950's . See Andrew Zimbalist (ed .) op cit. 6. 7.

Michel Aglietta, op cit, p .152 (emphasis in original) . ibid, p.167 .

8. By `self-service' we are referring to the historical phenomenon of the last 100 years whereby `households', rather than use labourintensive services (public transport, laundries etc .) have purchased material goods (cars, washing machines) to operate themselves ; thus, `paid employment (becomes) concentrated in technical and managerial occupations in manufacturing industry, while services are produced outside the formal economy, through direct labour, using capital machinery installed in the household' (Jonathan Gershuny, After-Industrial Society : The Emerging Self-Service Economy (Macmillan, 1978)) . 9. For elaboration of this, see Richard Hyman and Tony Elger, `Job Controls, The Employer's Offensive and Alternative Strategies', Capital and Class 15, Autumn 1981 p .115-149 . 10 . Coventry, Liverpool, Newcastle, North Tyneside Trades Councils, State Intervention in Industry: A Workers' Enquiry (Coventry etc. Trades Councils, 1980) . 11 .

In particular we refer to CSE London Working Group, The

Alternative Economic Strategy (CSE Books, 1980) .

12 . See OECD, Technical Change and Economic Policy (OECD, 1980) . 13 . Sam Aaronovitch, The Road From Thatcherism (Lawrence and Wishart, 1981) . 14 .

At least in the CSE London Working Group's version .

15 . This must certainly be the case in the printing industry! See Cynthia Cockburn, `The Material of Male Power' ; Feminist Review, 9 p . 41-59 (1981) 16. Material on the developments summarised here can readily be found in the technical and scientific weeklies like New Scientist, Technology Week and in The Economist as well as in the computer press and daily newspapers. There are many well known books and reports on developments in `chips', in information technology and in energy technologies . For more information on biotechnologies see Office of Technology Assessment, The impacts of genetics : applications to micro-organisms, animals and plants (OTA, 1981) and Advisory Council for Applied Research and Development et.al, Biotechnology (HMSO, 1980) .

37

Lysiane Cartelier Translated by Tony Millwood

The state and wage labour This paper is a critical analysis of the concept of the State under capitalism . In part I existing Marxist theories of the state are criticised for their functionalism in separating different instances such as economics and politics . In part II an alternative view of the State as constituting the wage relation is suggested . The wage relation is seen not as an exchange relation between equivalents but as a relation of submission . That is, the possibility of exchange is explained by state control as the mode of socialisation . point for this enquiry is a feeling of dissatisfaction with the treatment of the State in modern marxist theory, in particular with the way it is understood indirectly through its role, a role which is dictated in the main by the conditions of social reproduction . This procedure is inadequate - if it is not incorrect - for the following reason : having posited the State as (relatively) external to the process of production, it is then reintroduced by means of the functions (economic, political, . . .) which it is required to fulfill and which derive from the production process . To make its externality the basis for an understanding of the State, and to adopt a functionalist approach in identifying its role are both open to criticism, as they lead to a tendency to view the State as having been `parachuted' into a marxist THE STARTING

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theory of society which does not require a theory of the State at the outset . This defect in the way the existence of the State is established is probably due to the separation of the political and the economic into separate instances, with the State as part of the political sphere and displaying a tendency to become ever more involved in the economic base following an implicit or explicit law of the working of capitalism . From here the main question that is generally asked is not `why the State?', because it has already been established as a separate instance, but `what does the capitalist State do?' . Taking the category `capital' as a starting point, the analysis goes on to locate the State in relation to capitalist accumulation, with the State being seen as playing a part in the perpetuation of capitalist relations of production . Certain necessary functions are performed by the State, and the capitalist State is characterised as a class State since it is at the service of the dominant class or one of its fractions . To argue that the reproduction of the capitalist system cannot be fully assured simply by capitalist relations of production and that it requires the State is inadequate for the following reasons :because the State is only introduced into the analysis at (i) the point where it is required in the understanding of the operation of the capitalist system . It is introduced by default, where the need for a certain form of intervention is identified because, without it, one could not understand why certain processes or events occur . The argument that the system cannot reproduce itself without the State involves an implicit theory which is more keynesian than marxist . (ii) because it is circular : reproduction requires the State and the State is involved in reproduction . Even if this reasoning is not false, it does not help us understand the existence of the State . (iii) because it is tautological . When it is charactersed by its interventions, the State can be described as a class State only in the narrow sense that it places itself at the service of the dominant class . It is a class State only in the sense that it is part of a structure in which there is a dominant class,' which is tautological so long as the mechanisms by which class domination take a State form are not specified .' It is not so much the answers to the question posed that are inadequate as the question itself . If we start from the requirements of accumulation in order to understand the State

STATE AND WAGE LABOUR through an interpretation of its functions, we shall always be bound to say that the capitalist State is the State belonging to the capitalists (or to one of their fractions) since it is the organiser of their economic and political hegemony .' We need rather to begin with the question `why the State?' and to analyse it in the light of a theory - as yet not developed - of the fundamental unity of the different instances, so as to avoid `parachuting' the State at some point into the relations of production . That is why any attempt to reflect on the nature of the State as a historically specific form of class domination must start by viewing the State as a manifestation of a specific set of social relationships before seeing it as an expression of domination . The question we regard as pertinent-'why the State?'is only such if we see it neither as an enquiry into the origin of the State, nor an investigation of the relationship between man and society in general . We do not intend to locate our enquiry in the philosophical tradition which, since Rousseau, counterposes the possibility of the State to a state of nature with no such political organisation . Nor are we concerned with the debates among anthropologists on the question of `Society versus the State" or over the distinction between the State and power . For us, the individual cannot be understood without the social and the social implies the State, or at least a form of central authority which takes its place . Our argument proceeds as follows . In the first part we will seek to show that the failure of current theorisation of the State may be traced to the preoccupation of its authors with its externality and articulation . This leads us to propose, in the second part, a view of the State which is both less economistic and rejects the dichotomy between the economic and the political, and which sees the State as constituting the means by which individuals are socialised into society's commodity relationships .

The aim of this part is to show that an analysis which starts from the category `capital' in order to understand the capitalist State cannot avoid the double deficiency of taking a functionalist view of the role of the State and being unable to grasp the basis for its existence . These two defects illustrate the inadequate articulation between the State form and capital which in our view condemns this particular paradigm . This does not mean that the articulation capital/State needs better definition by refining the concept of `relative autonomy', nor does it mean substituting for capital another basic explanatory principle

41

][The externality of the State and the Reproduction of Capital : the Limitations of Functionalist Approaches to the State.

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(such as wants, power, etc . ) . It is a question rather of changing the approach to the one we shall attempt to describe later . A . The need to go beyond the articulation of State and capital

From the marxist point of view we need to go beyond the articulation of State and capital because it is unable to provide a theoretical foundation for the role of the State as a substitute for capitalists, a manager of society on their behalf . This is true as much of those authors who characterise the State in terms of the biased nature of its interventions' as of those who proceed from this model to examine the nature of the capitalist State . 6 Economic policies can be analysed in terms of services rendered to capital, and this is an essential element in a theory of the capitalist State which sees it as the State of capital . It is however necessary to go further and to consider the following question : why is it not adequate to understand the reproduction of capitalist relations in terms of the divisions of society into classes, class struggle and the process of accumulation? Why is it necessary to make appeal to an external element, which can only be the State, and moreover a State which necessarily becomes vested with an active role in this process of reproduction? What concerns us is not so much the idea that the State is the only agency which can be given this role, but rather the notion of there being a `required role' which follows from the identification of a vacuum in the process of reproduction which must be filled . Let us look more closely at the `required role' and then at why it is always filled by the State . The theory which understands the State in terms of necessity supposes that it is able to accomplish the functions that are required of it : it supposes that what is necessary for the functioning of the system will in fact occur . When the analysis incorporates the law of the tendency of the rate of profit to fall the State is seen as regulator of the process of accumulation .' . Having separated the realm of politics from that of commodity production, the political is brought back as part of a solution to problems that arise in the sphere of production . Whether it is a question of managing labour power as a particular commodity or of forcing the `bearers' of labour power to engage in wage labour, or simply counteracting the effects of the law of the tendency of the rate of profit to fall, we are always brought back to the same functionalist paradigm in which the State is defined in relation to the accumulation process and its requirements . In following this procedure the same laws of operation are assumed to operate in both spheres since in one



STATE AND WAGE LABOUR sphere - that of the State - we find those elements necessary for the regulation of accumulation . We may put this point slightly differently : if we assert that the reproduction of the system requires the intervention of an external element this amounts to asserting also that this external element follows, in the last analysis, the same laws of operation, if the idea of State action is to have any sense . But to what, then, is the State external? To say that there is a required role for the State amounts to introducing a law of its operation, which for some authors is that of the tendency for the rate of profit to fall and for others is the need to regulate the process of accumulation . Without such a law how would it be possible to conceive the following as theoretically (and not empirically) possible : (i) a specification of all the principles of causation (economic and political) which constitute the needs of the system and which are required for its expanded reproduction ; (ii) the existence of the means for translating these needs into State actions ; (iii) the guarantee that they will be effectively met by the State (notwithstanding the difficulties and concessions that the class struggle is bound to impose) . As well as the theoretical uncertainties which cast doubt on the existence of a law such as the tendency for the rate of profit to fail' we would also note that this functionalist perspective, insofar as it emphasises the separation of the economic and the political also reinforces the counterposition of State/economic base, State/civil society, public/private, political/technical distinctions which have rightly been criticised as methodologically false . Finally we should note the obvious contradiction which occurs when we invoke, in the same argument, the idea of the regulation of society and that of class struggle . The notion of regulation implies mastery and control and seems to us incompatible with that of class antagonism . When the State is invoked to play its required role in the process of reproduction - and whatever the judgement one makes as to its ability to meet these requirements - we are presented with another series of problems . Beyond the question of deciding who determines that the State should intervene in the process of accumulation is another, more fundamental question which concerns the very nature of the capitalist State : why is it the State and not another organ which appears specifically designed to respond to the needs of the accumulation process? In what ways is the State different from an enlightened employers' association?

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We would agree with the authors quoted earlier that whenever the interests of every capitalist do not coincide with that of the class as a whole the system needs a means of social regulation . Why does this take the form of regulation by the State? Even if we leave aside the difficulties noted above we cannot be satisfied with the answer given by the authors mentioned above which is summed up in the notion of externality . For Ameeruddy et al it is the separation of the reproduction of labour power from the sphere of commodity exchange that explains State intervention for the socialisation of labour . As such State intervention and the State itself are quite distinct from an intelligent capitalist . For de Brunhoff it is the externality of the State that is sufficient to explain State management of the reproduction of labour power . The same is true for Poulantzas, even though the term `relative autonomy' is preferred to that of externality . In each case it is the notion of the impossibility of the system being able to reproduce itself without the State and the need thus for the State that both provides the justification for the State's existence and an explanation of the specific forms taken by State intervention . This amounts, in short, to arguing that because it is necessary State intervention occurs ; because it occurs the State exists ; and it is because it exists that it is able to act thus . Let us conclude by summarising what we regard as inadequate in the model which examines the articulation between State form and capital . The externality of the State cannot enlighten us as to its nature because it is unable to show why on theoretical grounds the State would be better able than ierce or a `super capitalist' to identify and a Chamber of Cc pursue the long term interests of the capitalist class as a whole . While it is correct not to reduce the State to an individual capitalist how can we be sure that, from a theoretical point of view the State will function well for capital and better than an individual capitalist? The notion of the impossibility of the capitalist system reproducing itself without the capitalist State leads to the State being thought of as an adjunct to the accumulation process, and this is fundamentally a keynesian position regardless of how the argument may superficially be adorned . The functionalism of this approach culminates in the idea of the State being the conscience of capital - a social subject in itself, even if this conclusion is not intended by those who have developed the approach . If we do not wish to regard the State as the subject of capital, or its instrument or even as its substitute we must not posit from the outset its externality . We need another model to

STATE AND WAGE LABOUR that of externality/articulation . B . Elements of an alternative approach to the State form If we break with the view that the State responds to the needs of capital then we must go beyond a theory of accumulation which devolves to the State the primary functions of financing the social and private costs that capitalists cannot or will not bear themselves . One of these costs is that of the reproduction of the workforce, which in much marxist work is seen as being borne by the State since the time legislation was brought in to regulate the length of the working day in order to protect the survival of an overexploited proletariat . This approach is carried into the modern period to provide a sort of 'marxist theory of public goods' which explains the degree of health and education that the State provides to the workforce in order to maintain it in a suitable condition to serve the interests of capital . This approach is not far from that which criticises capitalism for its inability to meet human needs, thus giving to the State a role which is governed by the needs that it is required to meet . An initial step in constructing a less instrumentalist and less economistic view of the State is to not give a privileged position to the notion of costs that the State may meet . This is why it is useful to break with the classical marxist notion of labour power as a particular commodity because it is this that underlies the `costs of reproduction' model .' For our starting point we accept the usual distinction between labour and labour power, and the emergence of the domestic sphere which is external to that of commodity production and is not governed by the law of value and which produces workers who are not commodities but who are also not yet a social labour force . To understand the next stage, that is, the transformation of labourers into social labour which works within the constraints of the law of value, we need to go beyond the notion that the State is simply a form of external coercion which forces the bearers of labour power to engage in wage labour . What is more useful we believe is to examine directly the role of the State in constituting the wage labour relationship . There is a further point whose implications we should note . Before seeing the State as an expression of class domination it is useful to examine the State form . Our hypothesis is that the State is only intelligible when related to the commodity, which is the social form of private labours, which distinguishes it not only from a neutral principle of social organisation but also a surrogate employers' organisation . The appearance of commodity production implies the

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fundamental distinction between owners and non-owners of means of production . The latter have no role to play in commodity-producing society . They are from an economic point of view non-subjects, they cannot be socialised as such, and will only become so through the wage labour relationship (hereafter WLR) . As the mode of socialisation of non-owners, wage labour takes on specific social forms which make possible generalised commodity production .

We are not proposing to construct a general theory of socialisation, which would to us be a false objective . Nor are we supposing the existence of individuals outside the State or existing prior to the State and which the State comes to socialise - as if there is no socialisation before capitalism or outside it . We describe as 'statist' the kind of subordination that is contained in the WLR and we define as `State' the sum of the means of integration of non-owners into commodity relations (the principal capitalist form of socialisation) . That is why we regard the historic transformation of the WLR and of the State as mutually supporting . Beneath the institutional paraphernalia that today makes up the State and which appears to place it in a position external to capitalist relations we find what for us is the main principle by which to understand it, namely, the consolidation and adaptation of the WLR as a relationship of socialisation/subordination . This can be summed up in the proposition that the State is constitutive of the WLR and leads to an emphasis on the mode of socialisation that is peculiar to the capitalist mode of production . That proposed by classical political economy - the invisible hand - is unsatisfactory, as is that of Marx which sees exchange as sufficient to transform goods into commodities and to socialise human activities while failing to show how they have become social labour . Exchange should not be thought of as an automatic or neutral phenomenon into which dispossessed producers are inevitably pressed . We need to consider what historically makes exchange possible, and from what labour and goods derive their exchangeability which, when exchange has taken place, makes them into labour power and commodities . The answer lies in the WLR which must be understood as constituting the social in commodity producing since it is the relationship of subordination and not one of the exchange of equivalents .

The WLR is also a specific relationship of subordination in that it socialises the dispossessed producers through the measurement of their activity as workers, permitting their involuntary inclusion in commodity relations . This is not just

STATE AND WAGE LABOUR any form of authority but the capitalist form par excellence . Finally we should note another way in which the question of the State can be approached ." It seems that the WLR also merges historically with the State as monetary exchange becomes generalised in commodity producing societies under a money form which is both social and as such an early form of authority . Our hypothesis is rediscovered to the extent that it is not so much labour as that which is exchanged for the wage which is the expression of the State . Individual labours, although not commodities, are related one to the other as fractions of the total value produced, and are thus compared as numbers, that is in relation to money and/or the new State form . This is another way of saying that under capitalism individual workers are socialised as `measured workers' . The wage labour force becomes the mode of evaluating and socialising individuals . To bring out more clearly our notion of the State as constitutive of the WLR it is useful to specify how the WLR is a means of mobilising labour peculiar to capitalism ; how it is a means of social differentiation ; and how it transforms individuals who are the bearers of potential labour power into social use values for capital . We must understand first how the category `labour' originates . We then need to set out how this form of socialisation which is also a form of subordination expresses a relationship of authority, which is the basic form of the State or its surrogate . In the remainder of this paper we shall not go much further than to provide illustrations of the hypothesis through an examination of the conditions for the existence of social subordination in the history of socialisation . Ultimately our rejection of the separation of the economic and the political must rest on a theoretical understanding of their unity but this we have not yet developed . This is the central difficulty facing our project . Not only is the theory of their unity still to be put together but we might also ask whether such an effort would be worthwhile . The concept `State' connotes power, domination, hierarchy, etc ., while `accumulation' belongs to the realm of political economy, which is that of the quantifiable . Are we justified in seeking to bridge the two? If the proposition that 2 is smaller than 5 has a meaning, is the same true for the proposition that 2 is subordinated to 5, or dominated by it? To admit the validity of this procedure we must believe in the possibility of building a unified theory of the State and capital where it would make sense to consider both within the same order of relationships .

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Z The Capitalist State as Constitutive of the Wage Labour Relationship

We know that in the history of capitalism the WLR has a primary importance among the various possible means of mobilising labour . Without going into the historical reasons for this we have also argued that the WLR is the principal means of socialisation in capitalist society, even if we do not regard this as the quasi-automatic and undifferentiated process that Marx described in his Chapter on Primitive Accumulation . It is by a critical review of Marx's work that we shall attempt to characterise the WLR as a particular form of social discipline, so as to clarify the form of authority contained in this kind of subordination . It is in fact the specificity of this kind of subordination which makes the capitalist State incapable of being assimilated into other forms of authority . A . The WLR as the specifically capitalist mode of socialisation and the WLR as the minimal form of the State . (i) The distinction between the principle of subordination and the type of subordination . In his chapter on Primitive Accumulation Marx argues that the violent expropriation of independent producers made them into a potential proletariat, that the State was a part of this process with the enactment of savage legislation, leaving no alternative to the dispossessed but prison/execution or manufacturing . Thus already Marx makes the distinction between the principles governing accumulation and the role of the State and the confusion between the principle of subordination and the type of subordination . Both are problematic . The State is already being considered as an adjunct to a process external to it, and wage labour is considered an inescapable form of subordination . The distinction needs to be made between the reality of subordination, which is explicable only in terms of violence, and the type of subordination which can take several forms . Expropriation is insufficient in itself to constitute the expropriated as wage earners . It makes them into potential sellers of themselves, in the sense of there arising from here onwards the possibility of others using their time or their efforts . If brutal expropriation is sufficient to explain the subordination of producers it does not ipso facto make them into wage labourers obliged to sell their labour power as a commodity . History could equally have made them into agricultural slaves as in ancient Rome or into personal servants who are paid a wage, a form of slavery found particularly in early capitalism but different from the capitalist wage labour force proper . History and theory might have produced other real forms of the subordination of labour to that of wage labour .

STATE AND WAGE LABOUR We can therefore clarify the question of the State as follows : it is not a question of understanding why the WLR was imposed instead of slavery but rather of understanding how this relationship was imposed as a social relationship, and thus as a form of socialisation . It was imposed in this way rather than, for example, as a multitude of direct relationships between wage earners and their employers requiring no general principle of authority other than that exercised by each capitalist over his own particular workforce . This also helps us understand how we are able to talk about a proletariat which is not simply a collection of propertyless individuals but constitutes instead the working class . This particular form of subordination involves the State as an entity distinct from a collection of capitalists, and is more specific than the general notion of subordination which is adequately explained simply in terms of violence . (ii) The social conditions for the existence of wage labour as the specifically capitalist mode of socialisation Marx himself realises that the distinction expropriated/ expropriators is not in itself sufficient to explain wage labour when he says that `it is not sufficient that we find on one side the material conditions of work in the form of capital, and on the other men who have nothing to sell but their labour power . Nor is it sufficient that they are obliged by force to sell themselves voluntarily ."' In order for the various independent activities to be transformed first into social labour and then into labour power as a commodity in the manner that Marx, in spite of the above quotation, finally thinks is necessary, several other conditions must be met, and if these are not elaborated we are left with the assumption of the inevitability of exchange . Nothing in Marx's description of primitive accumulation enables us to assert that the private activities of independent producers become labour simply as a consequence of their spoliation" ; that a specific division of labour occurs corresponding to violence which forms potential labour into a commodity ; that different elements are brought together which make possible the `exchange' between the potential performance of labour in return for a portion of the value created in the form of a wage . It is not sufficient to assert that propertyless producers are obliged to become `free labour' because nothing else is open to them . Primitive accumulation is the moment when expropriation brings in the conditions for the development of commodity-socialisation which is illustrated in the following ways : c&c18-o

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the appearance of the category `work' in the modern sense, as distinct from the notion of activity or occupation which characterised the tasks performed by independent producers ; the need to reintegrate the despoiled producers into society and to make them into economic subjects of commodity-society and to socialise them into workers ; the appearance of a specific type of discipline, that of capitalist wage labour, which is a general and not an individual form of subordination . It is precisely because labour becomes the dominant way that producers are socialised that Marx describes wage labour as the `unique historical condition' which marks the transition from simple commodity production to the capitalist mode of production . (iii)

The WLR as the form of the State The WLR as a relationship of social subordination is the basic form of the State (or its surrogate) in that it is the primary capitalist form of social organisation and thus the primary expression of social authority. More precisely, it is the basic form of the State for the following reasons : because it is a means of social differentiation which deepens the antagonism between owners and nonowners of the means of production . because in transforming the bearer of potential labour power into use-values for capital it expresses what has recently been termed the `prescriptive model with a social function"' This is corroborated by a look at that other form of capitalist socialisation which appears at the same time as wage labour, that can be described as social security/prison/execution . Although it is secondary it is also a means by which individuals are situated with reference to labour since it converts non-labourers into social deviants, thus contributing to the strengthening of the WLR as the dominant form of social discipline . Historically the development of the WLR goes hand in hand with savage legislation directed against the poor, vagrants and more generally all those who refuse to engage in wage labour . Finally, if the State is constitutive of the WLR to the extent that initially it is merged with the same it then takes on progressively the role of forming individuals into social beings . From this perspective the major feature of the modern period seems to us to be the massive public intervention in the production and reproduction of a potential workforce . This is

STATE AND WAGE LABOUR seen as the penetration of the State into many areas of social life which carries with it the strengthening of the type of subordination inherent in the WLR . The generalisation of commodity production brought with it the extension of the WLR . This extension brought with it in the modern age of mass production necessary forms of consumption of the social product which itself required high wages and various forms of indirect payments derived from insurance and social security to provide relief in the event of the loss of wages . The appearance of new social forms to regulate individuals' living conditions which is reflected in the development of various centrallycontrolled means of collective consumption is the result of modern wage labour, in the double sense of subordination to a certain work process and obeying a certain mode of consumption . Is the choice facing the modern wage-earner very different from that of the expropriated producer in the time of primitive accumulation? The latter had the choice between the capitalist wage labour force, death or imprisonment . The modern worker has to opt for capitalist wage labour and economic death . This evolution is less an expression of change in the relationship of exploitation than a shift of the latter towards the `ideal collective capitalist' which is the State . What consequence follow from the hypothesis we have advanced? B. Some consequences of this approach . (i) One of the things that immediately follows is not to regard capital as the pivotal category in the analysis of the State form . This does not mean that we need to search elsewhere for another key category, nor should we abandon the idea of capitalist relations of production as the unifying principle of the social formation . But it does mean that we need to reinterpret the economic role of the State in terms other than the need to meet the contradictory requirements of capitalists and workers . By seeing the State as constitutive of the WLR we avoid having to see any correspondence between the needs of capitalists and workers, a view which can be justified only by economic reductionism . If the capitalist State transforms workers into use values for capital it is not because capital dictates its needs, nor because the State would be better able to meet them but because, by being an expression of the WLR it does not allow any other means for the reproduction of labour power than that imposed by the level and the form of the wage . This reproduction is necessarily the reproduction of labour power for capital as the levels of wages and the mode of consumption which result are strongly determined by capital as well as by class struggle .

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(ii) The fact of the means of production being privately owned did not automatically determine the means whereby workers would become available but rather required a particular kind of socialisation . Henceforth the WLR cannot be conceived as an exchange relationship for, in capitalist society any exchange relationship involves the exchange of values . But labour power cannot be a value since it is not produced by labour but is the result of the worker's consumption of use values created outside the sphere of commodity production whithin the domestic sphere . The WLR is a particular means of socialisation in that it formalises the non-ownership of property and reveals in this way its central characteristic as a relationship of subordination . It is as such and as the capitalist mode of mobilising labour that the WLR is the form of social organisation, the capitalist form of social authority . To see the WLR as the foundation for the State avoids seeing the State as first outside the realm of value, and then brought in at a later stage at the invitation of political economy . The WLR is not external to the realm of value since part of the value created is conceded to the workers in the form of the wage so that it can subsequently engage in the production of value . If the wage labour force is not external to the realm of value then neither can the State be . We just need to extend this analysis in order to understand which forms of domination other than economic exploitation are perpetuated by the State . We still need to examine the violence inherent in the values and the practises of public services, and to look at the relationship between the workforce and collective consumption managed by the State . (iii) There is finally a question that we will not answer . To see in the State the incarnation of the social and to stress the non-automatic and specific characteristics of wage labour implies that there may be other forms of socialisation to this one . Is the idea of the State as being a form of domination a relevant one if socialisation is to be found other than through wage labour? Furthermore can the State be understood independently of the idea of class? Can a State be conceived which is not a class State (outside capitalism of course) and, more generally, does the marxist notion of class exhaust that of exploitation and oppression? We simply raise the question . We cannot conclude this piece of work because it is part of a much broader attempt to understand the State and this only constitutes a first step . We have simply sought to lay the basis for a less economistic perspective of the State and one which is less dichotomistic, and doesn't result in the State being



STATE AND WAGE LABOUR parachuted into an argument from which, at the start, it is absent . Having done this we hope we have raised some ideas that could form the basis of further work which does not result in seeing the State as a necessary response to the needs of capital . We hope also to have cut short the sterile debates around the notion of relative autonomy which has served to obscure some real problems . To pose the question of the State in terms of relative autonomy is unhelpful for it perpetuates the counterposition of State and `material base', and reinforces the separation of the economic and the political into separate 'instances', each with their own specific functions . There is an urgent need to direct attention not on what the State is not but rather on what the State is .

1 On this point see Simon Clarke 'Marxism, sociology and Poulantzas' theory of the state', Capital and Class No . 2, Summer 1977 . 2 This aspect is mentioned by F . Engels although he does not develop the point, in The Origins of the Family, Private Property and the State . 3 We are referring here to the theses of the State Monopoly Capital school . 4 To take the title of a recent influential work by P . Clastres . 5 This is true of the StaMoCap school and of others such as S . de Brunhoff, Etat et Capital (Maspero, 1977) and J . Holloway and S . Picciotto, 'Capital, Crisis and the State', Capital and Class Summer 1977 . 6 A . Aumeeruddy, B . Lautier and R . Tortajada 'Labour power and the State' Capital and Class Autumn 1978 which, in spite of a promising start does not escape the criticism we are making . 7 See J . Holloway and S . Picciotto in the reference cited earlier and N . Poulantzas in `La Crise de l'Etat', (P .U .F . 1977) . This position is we believe implicitly adopted in the work of de Brunhoff and Aumeeruddy et . al . cited above . 8 These theoretical doubts are such as to invalidate this particular law . These have been extensively discussed and we shall simply list the main ones : doubts concerning the transformation of values into prices ; doubts concerning the generation of a uniform rate of profit and the meaning of a structure of profit rates, doubts about different meanings of the concept of the rate of profit : general rate, required rate, average rate, etc . . . 9 Can we be sure that labour-power is a commodity for is it not the result of concrete labours carried out independently one from the other? See C . Dangel and M . Raybaud, 'Le role de 1'etat dans la reproduction de la force de travail', Memoire de D .E .A ., Nice 1977 . Why should labour power be a particular commodity possessing the use-value of being able to create exchange value, other than to be able

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to solve in advance the theory of the commodity? See on this point J . Maunoury 'Theorie marxiste de la valeur et normes sociales de valorisation - un essai critique' Working paper, Nice, 1978 . On labour power as not being a value, see B . Lautier and R . Tortajada `Ecole, force de travail etsalariat' PUG-Maspero 1978 . 10 C . Benetti and J . Cartelier, 'Marchandise, Salariat et Capital', forthcoming . 11 K . Marx Capital, Vol . 1 Ch . on Primitive Accumulation . In reading the work of certain historians it is striking to note 12 that before capitalism the notion of work does not seem to exist as such . Individuals are 'busy' all day doing various things that they carry out, or cease, without any notion of labour, even free, that must be performed within a certain time . The notion of leisure and rest after work also does not seem to exist . One has the impression of there being a continuum of activities and occupations which do not follow any rhythm other than that dictated by the personal preoccupations of those who undertake them . See E . Leroy Ladurie Montaillou, Penguin Books . The same can be said for certain so-called primitive societies where there is no linguistic distinction between 'work' and 'play' . See M . Sahlins Stone Age Economics Tavistock Press . 13 To take M . Aglietta's term which he applies to the modern mode of consuming commodities that we believe can be extended to include the capitalist mode of mobilising labour . M . Anglietta `L 'occident en desarroi ruptures', Dunod, 1978 .

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John Martin

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The conflict in Northern Ireland: Marxist interpretations Two major schools of thought within Marxist analyses of Northern Ireland are identified : the `anti-imperialist', which argues that imperialism is responsible for sectarian division and conflict in Northern Ireland, and thus sees national independence as a necessary precondition for socialism ; and the `revisionist', which emphasizes internal factors in the development of the `Northern Ireland problem' and views imperialism and the British presence as largely progressive . The relative strengths and weaknesses of these two approaches are assessed . It is argued that in spite of several serious shortcomings, the `anti-imperialist' approach is the more satisfactory of the two, in that, by directly challenging existing social relations in Northern Ireland it proposes a meaningful strategy for the advancement of socialism in Ireland .

Introduction

AT FIRST sight the present conflict in Northern Ireland appears

to present a startling refutation of many of the most important principles of Marxism . Political debate is dominated by national and religious questions, and the various sections of a polarized proletariat are apparently more willing to ally with their bourgeois co-religionists so as to engage in sectarian warfare, rather than co-operating in a united struggle to improve their living conditions as a class . This picture has led a

N . IRELAND : MARXIST THOUGHT group of Marxists to the conclusion that, `Irish Marxism is . . . in danger of extinction, politically and intellectually . It's prospects for survival, let alone development seem slim' (Bew et al, 1979, p .1) . Marxist attempts to analyse the `Northern Ireland problem' can be usefully divided into two broad, but clearly distinguished schools of thought, which parallel in some way the sectarian division in society . These two contrasting approaches, which I shall label `anti-imperialist' and `revisionist' differ over such fundamental issues as the nature and importance of imperialism in Ireland, today and in the past, the role of the British state, the nature of the present crisis in the six counties, and the most appropriate strategy for the growth of socialism in the country as a whole . The purpose of this article is to assess the strengths and weaknesses of these two approaches in terms of explanations they offer of the present conflict, and the strategies they propose socialists should adopt in their attempt to intervene in this conflict .

The traditional `anti-imperialist' analysis of Ireland can be said to derive from the works of Marx, Engels, and Lenin, though it owes much more to the writings of Connolly . Much is often made by Irish Marxists of the statements by Marx, Engels, and Lenin on the desirability, indeed necessity of Irish independence . These statements, however, are generally quoted without reference to the historical conditions in which they were formulated . Whilst Marx did, from the mid 1860's onwards, advocate Irish freedom from Britain, he did so `not from considerations of "justice for Ireland", but from the standpoint of the interests of the revolutionary struggle of the oppressor, i .e ., British, nation against capitalism .' (Lenin, 1973, p .214) . Certainly neither Marx nor Lenin believed any nation had an automatic right to self-determination . Marx was less concerned with the consequences of independence in Ireland itself, than with it's impact on the balance of class forces in Britain and Europe (1978, p .404) . Marx believed Irish self-determination would help advance the cause of socialism in England in two ways . Firstly, he argued, an independent Ireland would immediately experience an agrarian revolution, which would lead to the downfall of the English aristocracy not only in Ireland but also in England . Secondly, it would remove a very important source of division among the English working classes, and thus hasten their radicalisation (ibid, pp .406-7) . Similarly, Lenin supported such actions as the 1916 uprising, not because he believed the Irish people had a `right' to independence, but

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as it was part of an international struggle against imperialism (1973, p .260) . Connolly's writings, particularly those on the relationship between nationalism and socialism, and on the nature of sectarianism in Ulster have been very influential among Irish Marxists . According to Connolly, Irish Independence from Britain would be illusory unless it was accompanied by a social revolution, thus he argued that, `If you remove the English army tomorrow and hoist the green flag over Dublin castle, unless you set about the organisation of the socialist Republic your efforts would be in vain' (1973a, p .124) . Whilst political independence represents a first requisite for socialism (ibid, p .145), the domination of the country by England would continue unless real, i .e . economic independence was also achieved . It follows from this that socialism will be impossible in Ireland until the whole country is free from Britain, and that the struggle for national liberation must be part of a wider struggle for socialism . Connolly considered the Protestants of Ulster to be an `integral part of the Irish nation' (1972, p .8), who would, as they suffered the same exploitation as Catholics, join in a united battle against the British and Irish bourgeoisie (ibid, p .39) . Popular Protestant opposition to Home Rule was, he believed, a result of the `skilful use by the master class of religious rallying cries' (ibid, p .31), which would be overcome by teaching Protestant workers Irish history (ibid, 1973b, p .151) . Nowhere in Connolly's writings is there any evidence of an awareness that the Protestant working class, or any other class in Ireland, had a material interest in the preservation of the union with Britain (B&ICO, 1972a, p .1 .) Connolly's teachings are today best represented in the works of de Paor (1970), McCann (1980) and Farrell (1976) . These authors accept Connolly's synthesis of nationalism and socialism, but while they agree with many of his arguments about sectarianism in the North of Ireland, they differ from him in recognising the real interest the Protestant bourgeoisie had in rejecting claims for Irish Home Rule . Their basic argument is as follows . The natural conflict in any capitalist society is between the native bourgeoisie and proletariat . The development of such a conflict in the North of Ireland has been distorted by the operation of British Imperialism, which has sought to divide the working class and the country, so as to further the ends of the British ruling class, thus it is argued that it is the constant presence of Britain which, `keeps the sterile quarrel of Orange and Green alive' . . . (de Paor, 1970,p .xx) According to these writers the Northern Ireland `state' was an artificial creation

N . IRELAND : MARXIST THOUGHT `arbitrarily carved out of the province of Ulster' (ibid, p .xv), which was established on the basis of an alliance forged between the Unionist bourgeoisie, who need to retain the union with Britain in order to safeguard their imperial markets (Farrell, 1976, p .19 : McCann, 1980, p .122), and the British ruling class who wished to continue the occupation of the six counties for economic, political, and strategic reasons (Farrell, 1976 . pp .325-6) . To ensure the support of the Protestant working class for their campaign against Irish independence, and to inhibit the emergence of a united Labour movement, the British and Unionist ruling classes pursued a number of divisive strategies . Orangeism was fostered as the dominant ideology among the Protestant masses ; this involved emphasing pre-existing divisions in society, and arousing, if not actually creating, fears among the Protestant community about the intentions of the catholic minority and the nature of the `Southern' regime (de Paor, pp .xvii, and 62) . At the same time a material base for this ideology was created by the pursuit of an active programme of discrimination, particularly in employment, by the Northern bourgeoisie in favour of the Protestant working class, which gave this class an interest in protecting their relatively `secured and well-paid jobs' (Farrell 1976, p .199) . The failure of the Northern Ireland labour movement can thus only be understood `against the background of religious discrimination in employment which divided the working class' (ibid, p .11) . Both the ideology of Orangeism, and the practice of discrimination were institutionalised in the form of the Stormont statelet following partition . The material base for sectarian politics is said to have begun to erode in the early 1960's due to the entry of monopoly capital into Ireland . McCann and Farrell argue that the multinationals had no real interest in maintaining discriminatory employment policies, and also that they desired better relations between the two parts of Ireland, and between the Governments of `Southern' Ireland and Britain (McCann, 1980, p .124) . Far from bringing about the disappearance of Orangeism, however, this has assumed a `virulent life of its own' (Farrell, 1976, p .11) and was transformed from being a mere tool of the Unionist bourgeoisie `to become the dominant force in Northern Ireland' (ibid, p .331) . The rise of the Civil Rights Movement, and the loyalist reaction to it, led to the emergence of a `struggle against imperialism, for national liberation' . If this struggle in the North could be linked to economic discontent in the rest of Ireland, it could lead to a

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socialist revolution throughout the country, and possibly in Britain as well . Consequently, the first step towards socialism is the overthrow of the British state in the six counties, and the unification of the whole country (ibid . p .p . 330-5) . The greatest weakness of the approach outlined above is it's treatment of the Protestant working class . In the works of de Paor, McCann and Farrell this class is portrayed as a collection of dupes, continuously and relatively easily manipulated by evil capitalists for their own ends . Since the 1960's Protestant workers seem to have been in an even worse position than before . Whereas formerly they supported the Unionist bourgeoisie because of the preferential treatment afforded them, their actions are now said to be determined by a redundant and baseless ideology . Indeed in this analysis the ideology of Orangeism undergoes a remarkable transformation, from a simple reflex of economic advantage to the determinant force in society . As Nairn has pointed out, (1981, p .231), the argument that the partition of Ireland was the result of an imperialist conspiracy largely ignores the importance of the uneven development of capitalism within the island . Although Farrell accepts such a process did occur in the nineteenth century, by concentrating on the effects of this on the `Ulster' and British ruling classes he fails to appreciate the extent to which all Northern Protestants had gained deep economic, social and political, as well as religious reasons for rejecting the campaign for Home Rule . As a consequence of this these anti-imperialist writers are forced to assert that if it were not for discrimination the Protestant and Catholic working classes would be united . If even every allegation of discrimination was true, however, it could not produce `so prodigous a result' (Whyte, 1978, p .261) . By treating the Protestant proletariat as prisoners of various fractions of the bourgeoisie, Farrell and McCann are unable to adequately account for the development of the class alliance on which the statelet was founded . Some of these arguments, particularly those on the relationship between monopoly capital and sectarianism in Northern Ireland, have been challenged in the recent publication by O'Dowd et al (1980) . The basis of this work is a detailed study of the impact of Direct Rule since 1972 . O'Dowd et at concluded that the direct management of Northern Ireland by the British Government has done little to resolve the deep divisions in society . This failure they attribute not to the actions of the IRA/ INLA (Irish National Liberation Army) but to the nature of sectarianism and sectarian division in the North of Ireland, and the basic function of a capitalist state . According to these

N . IRELAND : MARXIST THOUGHT writers sectarianism cannot be treated as a superstructural phenomena, sectarian division is a `material reality which has been constituted and re-constituted throughout the history of capital accumulation and class struggle in Ireland as a whole' (1980, p .25) . In their study of regional policy O'Dowd et al argue there is little evidence to support the claim that the multi-nationals operate in a progressive manner, rather they found that `Just as Courtaulds do little to undermine apartheid in South Africa ( . . . ), so also they do little to reduce sectarianism in Dungannon' . Indeed the `modernising forces' associated with the entry of monopoly capital into Ireland `far from undermining sectarian division . . . construct it in a contemporary form' (ibid, p .63) . As the restructuring of the Northern Ireland economy has, if anything, actually widened the socio-economic gap between the two communities (ibid, pp .30-68), the Protestant working class continues to have a strong material interest in the preservation of British rule, and their actions in the present crisis cannot simply be dismissed as a product of their submission to a groundless ideology . This analysis also provides a better understanding of the actions of the British state in Northern Ireland today . As `sectarian division is a class phenomenon' the British state must recognise and work within pre-existing divisions in society, as to do otherwise would involve the state in an impossible task, the transformation of class division (ibid, pp .24-25) . The primary role of the state in a capitalist society, that of reproducing `the conditions within which capitalist accumulation can take place' (Cockburn, 1977, p .51) means that it is structurally impossible for the British state to perform the progressive role most commentators ascribe to it . Surprisingly, within the `anti-imperialist' school there has been no real analysis of the concept of imperialism, and the term is used in a very broad and somewhat confused manner . For de Paor the essence of imperialism is the `exercise of responsibility in the affairs of other people, however wellmeaning' (1970, p .xx) ., i .e . it has no economic significance whatever . In the works of McCann and Farrell imperialism is discussed exclusively in terms of the military, economic and political domination of the North of Ireland by Britain, without regard to the changing nature of capital accumulation and class struggle, either in Ireland or at an international level . The recent debate on the meaning of `modern' imperialism conducted by such people as Amin (1977), Emmanuel (1972) and Frank (1971), has made little impact on Irish Marxists and certainly none of the concepts utilised by these authors in their study of monopoly capital have been applied to Ireland in a

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systematic way . Indeed there has not even been any attempt to analyse development in Ireland in terms of Lenin's (1978) writings on imperialism . It is simply assumed that as Britain continues to occupy a part of Ireland, British imperialism must remain a major force in society . No attempt has been made to assess just what the interests of the British state in Ireland today actually are, or how these might have changed over the last sixty years . The `anti-imperialist' school has made very few advances on the works of Connolly . In general Connolly's followers have been content to simply echo his teachings, rather than evaluating and up-dating them in the light of the many changes which have taken place in both Britain and Ireland since his death in 1916 . The only significant development within this school has been that of accepting Northern Ireland, rather than Ireland as a whole as a basic unit of analysis, which has only served to weaken this approach even further .

N . IRELAND : MARXIST THOUGHT Since the renewal of civil strife in 1968 there has existed a second major strand of Marxist writings on Northern Ireland which offer very different `explanations' and `solutions' . The term `revisionist' as used in this essay simply refers to those Marxists writing on Ireland who have questioned, and rejected many of the basic tenets of the traditional, i .e . anti-imperialist approach, and no other significance should be attached to it . This revisionist approach is largely made up of the works of the British and Irish Communist Organisation (B&ICO), Boserup (1972), Nairn (1977, 81), Probert (1978), and Bew et al (1979) . A basic source of agreement among these authors is their belief that imperialism is not of crucial importance in Ireland today, and indeed never was (B&ICO, 1972, p .75 : Boserup, 1972, p .183 : Probert, 1978, p .46 : Nairn, 1981, p .323 : Bew et al, 1979, pp .24-25) . Rather than the external forces, emphasis is placed on internal factors, in particular the uneven development of Irish capitalism in the nineteenth century, in explaining the emergence of the two distinct communities in the North, and the sectarian politics which accompanied this . This uneven growth is variously attributed to different systems of land tenure in the two parts of the country (B&ICO, 1972, p .4 : Boserup, 1972, pp . 159-60), the existence of a number of modes of production within Ireland (Probert, 1978, p .36 : Bew et al, 1979, p .31), or the natural consequence of capitalist development (Nairn, 1981, p .229) . This process is said to have given the Protestant population, through the industrialisation of Ulster, a material interest in rejecting attempts to unify the country . As imperialism is not a major force in society there is no possibility of the campaign being waged by the IRA and INLA developing into a struggle for socialism in Ireland . On the contrary, this struggle actually inhibits the growth of `socialist politics' by perpetuating divisions within the working class, and by driving Protestant workers into the arms of their Orange bosses (B&ICO, 1975, p .56 : Boserup, 1972, pp . 159 and 188 : Probert, 1978, p .147 : Nairn, 1981, p .232 : Bew et al, 1979, pp .220-1) . Not surprisingly, as these writers disagree so fundamentally with the `anti-imperialist' approach on the nature of the conflict in the North, they also propose markedly different `solutions' . Rejecting the idea that the Northern Ireland `state' should be destroyed and the country united, a variety of strategies are advanced . For both Probert (1978, p .149) and Bew et al (1979, p .221) the only hope of a progressive solution is through uniting the working class within a reformed Northern Ireland `state' . Nairn contends that the rights of the Protestants of Ulster to self-determination must be recognised by

The Revisionist school

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all concerned as a first step towards socialism . Boserup accepts this point, and also argues that Irish Marxists should enter into a `tactical' alliance with British Imperialism (1972, ppl87-8) . The B&ICO see the way forward in the form of a united British and Irish working class (1975, p .55) . The earliest, and in many ways still the most extreme form of this approach is that expounded by the B&ICO in a series of pamphlets over the past ten years . According to this group the uneven development of capitalism, based on the so-called `Ulster custom' system of land holding gave rise to two nations within Ireland, the Protestants of Ulster, and the Catholics of the rest of the island . As the Protestant population constitute a separate nation (the B&ICO never seem to be sure whether the Protestants are part of the `British nation' or are an independent nation, either way they are not part of the Irish nation) they have a democratic right to self-determination (1975, pp . 2-4) . It is the denial of this right by the Irish nation which is to be held responsible for the divisions among the working class in Northern Ireland (1975b, p .50) . The `South' of Ireland is portrayed as being virtually a theocracy, and thus the Protestants of the North, by refusing to be incorporated into such a regime, have played an essentially progressive role, and this community is said to have been in the `vanguard of bourgeois civilisation in the world' (ibid, p .47) . This thesis has been criticized from many sources . As Whyte has pointed out (1978, p .263) the claim of the Protestants of `Ulster' to constitute a distinct nation is a very weak one . Of course the opposition by Northern Protestants to the campaign for Home Rule in the period 1885-1921 was not conducted on the grounds of their right to self-determination, but as a denial of this right to the people of Ireland as a whole (Patterson . 1980, p .147) . Furthermore, the significance of the `Ulster custom' is the industrialization of Ulster, and thus providing a socio-economic base for this new `nation' has been greatly undermined (Solow, 1971, pp .24-45) . Finally, while recent studies of the South of Ireland have shown that Protestants could have justifiable fears about the extent of clerical influence in that state, the claim that it is almost a theocracy lacks any substantial supporting evidence (White, 1975 : Whyte, 1980) . In his book, The Break-up of Britain (1981) Nairn agrees there exist `two potential national communities and states in Ireland' but argues that due to the inability of the Protestants of Northern Ireland to construct a strong Ulster nationalism there are not two nations corresponding to these two communities . The failure of an Ulster nation to emerge is said to arise from

STATE AND WAGE LABOUR the `double isolation' of the Protestant community, and the economic development of the `province' . The Northern Protestants have found themselves caught in between Britain and Ireland, being objectively part of Ireland but wishing to be British, and although they are very suspicious of the intentions of the British Government towards them, they have put a British sense of identity before a specifically `Ulster' one . Ironically the economic strength of this community, which has enabled them to force Britain to intervene on their behalf, has only increased their dependence on the union with Britain, and thus has further retarded the rise of a Protestant nation (1981, pp .237-41) . Nairn accepts Farrell's point that the `national question' must be resolved in Ireland before the emergence of socialism is even possible, but this should mean granting Protestants the right to self-determination, not the establishment of a united Ireland (ibid, pp .244-6) . In spite of all the difficulties involved, Nairn argues the most likely development in the future will be towards the formulation of a `more than nominal Ulster nationalism ' (ibid, p .241), leading to an independent `Ulster' . Indeed the Protestants of Ulster must have `self-determination forced down their throats' if they are ever to adopt progressive politics (ibid . p .399) . Nairn criticizes those who highlight the difficulties entailed in establishing an `independent Ulster' yet it is these very difficulties which undermine the viability of his proposed `solution' . Nowhere are we told why forcing the right of selfdetermination down the throats of the Northern Protestants should push their politics in a progressive direction, and in reality the complete opposite would occur . The most likely outcome of an independent six county state would be economic collapse and civil war . Even if the Protestants were to win such a war, it would result in an even more sectarian state resting on a rapidly declining economic base - hardly the most conducive conditions for the growth of `progressive' politics. Nairn himself makes the point that monopoly capital has an interest in preventing a civil war in Northern Ireland, which he describes as a `scenario of total capiitalist disaster' (ibid, p .237), and it is difficult to see why Britain should create a situation in which such a conflict would probably be unavoidable . The central concern of Bew et al's analysis is the relationship between the Stormont `state' and relations within the Protestant bloc . On the basis of the work of Balibar (1977), Bew et al argue that the basic role of a capitalist state is to `hinder the unity of the dominated classes' (1979, p,212), so as to `maintain the conditions for the exploitation of the proC&C,9-E

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letariat' (ibid, p86) . The state functions as an arena in which a number of contending bourgeois strategies to this end can be devised and operationalized . The particular form taken by the state in a society is determined by the character of the bourgeois strategy which becomes dominant at any one time . In the context of Northern Ireland the sectarian nature of the Stormont regime was a consequence of the triumph of the `populist faction' for the ruling class within the `state' apparatuses . The Northern bourgeoisie are said to have been forced to concede a portion of `class power' to the `Orange section of the working class' so as to retain their hegemony over this class (ibid, p .49) . The `state thus proved very responsive to the needs of the Protestant community, largely through the spending of considerable sums of public funds, whilst simultaneously pursuing an exclusivist policy towards the Catholic minority . Such a strategy had the double advantage of integrating the Protestant working class into the dominant class alliance, and deepening divisions within the class as a whole . (ibid, p .68-92) . Although this programme proved quite successful for long periods of time, Protestants cannot be treated as unproblematically supporters of their bourgeois co-religionists (ibid . p .218) . Significant sections of this class have apparently escaped from bourgeois control on several occasions, most notably in the late 1950's, when they are said to have been deeply influenced by the secular ideology of the Northern Ireland Labour Party (NILP), (ibid, pp .131-2) . For Bew et al the only possible way progress can be made in Northern Ireland is by winning the Protestant masses once again from sectarian politics, a process they see as being made even more difficult by the actions of the IRA (ibid, pp .220-221) . This analysis can be criticized on a number of grounds . The significance of increased Protestant working class support for the Northern Ireland Labour Party in the late 1950's and early 1960's is greatly exaggerated . From 1949 at least, the NILP had been an explicitly unionist party, maintaining a very strong line on the `union', whilst ignoring Catholic grievances about discrimination and repression (Rumpf & Hepburn, 1977, p .205) . The actions of the Protestant working class in this period represent less an adventure into secular politics, than an attempt to extract more from within their own exclusivist class alliance, and it was very successfully treated as such by the Unionist Government of the day . In their study of Northern Ireland Bew et al appear to confuse the terms state and government, the latter narrowly defined in parliamentary term. Throughout their work there are references to the `Northern

N . IRELAND : MARXIST THOUGHT Ireland state', and even to 'inter-state' relations between the governments of Northern Ireland and Britain . They are thus able to present the introduction of Direct Rule in March 1972 as signifying `the death of the (NI) state' (ibid, p .162) . Of course Northern Ireland did have its own parliament for over half a century (1921-72), albeit with limited powers, but there was never a separate Northern Ireland state . Since partition the state in the North of Ireland has been the British state, whether in the shape of a devolved Unionist government, or a `Direct Rule administration (O'Dowd et al, 1980, p .27) . The collapse of the Stormont regime cannot, therefore, represent the qualitative break Bew et al attribute to it . Overall however, the revisionist school has, by challenging many of the assumptions which form the basis of the anti-imperialist approach, stimulated a much needed debate within Irish Marxism, and has thus made a vital contribution to it's further development . This is particularly true as regards the Protestant working class, who had formerly constituted a virtual blind spot among Irish Marxists . By focusing attention on the complexity of this class's politics in Northern Ireland, the revisionist school has highlighted an important deficiency in the anti-imperialist approach, which has generally tended, with a mixture of contempt and idealism, to look upon Protestant workers as `deluded lackeys' who will, one day, recognise their `real interests' and join with the Catholic minority in a joint struggle for independence . Nevertheless the pressupositions of the revisionist model contain a number of shortcomings, most notably its treatment of the role of Britain, and imperialism in Ireland . In a recent article Smyth has argued that Britain's role in Ireland cannot be reduced to a series of more or less planned `external' interventions, as do, for example, Gibbon (1975), and Bew et al (1979) . British intervention was both constant and planned, and proved decisive in the development of capitalism in Ireland, and the `peculiar' class structure which arose on the basis of this . By concentrating on the internal reasons for the emergence of sectarianism and sectarian division, the revisionist approach largely ignores the extent to which the Irish social formation, in which Nationalist and Unionist politics have a firm material base, was a product both of internal conflicts and conflict with Britain (1980, pp .40-2) . Imperialism in the works of the revisionist school is considered to be either a progressive force, or unimportant in contemporary Ireland . In their treatment of the impact of monopoly capital in Ireland Boserup, Nairn and Probert differ very little from McCann and Farrell, apart from the fact that the former writers are even more convinced of its progressive

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tendencies . Once again we are told the multinationals had no `vested interest of their own in maintaining sectarian employment patterns' (Probert, 1978, p .76), or in the survival of the Northern Ireland `state' (Nairn, 1981, p .232) . Indeed the interests of monoply capital are seen as being incompatible with those of the Orange system, and hence demanded a revolutionary `recasting of the entire political economic and ideological structure' (Boserup, 1972, pp .169-70), which promises to undermine the'social and political archaism' of the `province' (Nairn, 1981, p .243) . As the state in a capitalist society functions in such a way as to further the class interests of the dominant fraction of the bourgeoisie, one can only assume the actions of the British state in the North of Ireland are also by definition, progressive . Taking this argument to its logical conclusion it would appear that the representatives of the British ruling class, and the multinationals have been co-operatiing for years in an effort to create a united Irish working class! Nowhere do Boserup, Nairn or Probert explain why the multinationals should have no interest in perpetuating sectarian division, neither do they provide any evidence to support this contention . Even a cursory glance at the history of capital accumulation clearly shows that `modernization' cannot be simply regarded as a progressive force, indeed this process has been inextricably linked with the structural underdevelopment of large areas of the world (Frank, 1972) . The capitalist mode of production does not require a liberal-democratic political system in order to survive and flourish, it has shown itself compatible with a wide variety of political arrangements, from social democratic to authoritarian, populist and fascist (O'Dowd et al, 1980, p .22), and just as the develoment of the `West' is dependant on the underdevelopment of the `South', so too the existence of parliamentary democracies in the `advanced world' is closely associated with dictatorial regimes in many countries of the `Third World' . Far from treating them as obstacles to be brushed aside, monopoly capital has found it beneficial to support and maintain, `archaic social structures' so as to further their own interests (Mandel, 1972, p .475 : Hoogvelt, 1975, pp .96-108) . We have already seen that there is little or no evidence that multinational corporations have undermined sectarian division in Northern Ireland . There is some evidence that they have contributed to its maintenance . Bew et al found that the multinationals experienced few difficulties in conforming to the `practices of old capital', and were quite satisfied with the nature of the Stormont regime, (1979, p .189) . However, the marginal significance Bew et al attribute to imperialism leads

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them to ignore the consequences of this on the actions of the British state in Northern Ireland today, and can thus describe Direct Rule as a `distinct improvement on the regime it replaced', (Morgan and Purdie, 1980, p .169) . In so doing they fail to recognise not only the centrality of the British state in the North of Ireland since partition, but also the constraints placed upon that state's operations by virtue of the central role in capital accumulation, that of ensuring the reproduction of the conditions under which such accumulation can take place . In Northern Ireland the state must reproduce sectarianism and sectarian division, if it were to do otherwise it would cease to be a capitalist state . In conclusion I would like to say a few words on the opposing strategies proposed by these two schools of thought for the advancement of socialism in Northern Ireland . It is in dealing with this issue that the shortcomings of the revisionist model become most evident . One of the main reasons for Bew et al's pessimism about the future of Irish Marxism lies in its alleged subordination to nationalist, i .e . bourgeois, ideology . (1979, p .37) . However it is the arguments of the revisionist school, such as those on the role of Britain, and imperialism in Ireland today, and on the nature of the present conflict which appear as little more than echoes of the claims of the British Irish bourgeoisie . By accepting the claims of the British state to be acting in a progressive manner, those within the revisionist school fail to recognise, let alone challenge, the central role the British state plays in Northern Ireland, that of reproducing sectarianism and sectarian division . None of the `solutions' advocated by this group, such as a reformed Northern Ireland `state', an independent `Ulster', or a `tactical' alliance with British imperialism, pose any threat to the `dictatorship of the bourgeoisie' (Balibar), and if implemented, would only serve to provide the bourgeoisie with a with a firmer base from which to continue their rule . The anti-imperialist school, inspite of its many weaknesses, in particular its persistent failure to analyse seriously the ideology and activities of the Protestant working class, does at least support a strategy which directly threatens the British state's maintenance of existing social relations in Northern Ireland . Overall, it is clear that both sets of 'interpretations' contain serious faults . Of the two, the anti-imperialist approach is the more satisfactory, and should provide a useful starting point for further research by Marxists on Ireland .

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Note

I would like to thank the editors of Capital and Class, Christina Loughran, and especially Liam O'Dowd for their valuable help and advice during the writing of this essay . References Amin, S . (1977) Imperialism and Unequal Development (Harvester Press) . Balibar, E . (1977) On the Dictatorship of the Proletariat (NLB) . Bew et al . (1979) The State in Northern Ireland, 1921-72 (Manchester University Press) . Bew et al . (1980) Some aspects of Nationalism and Socialism in Ireland, 1968-78 . In, Morgan A . and Purdie, B . 1980, Ireland : Divided Nation, Divided Class (Inklinks) . Boserup, A . (1972) Contradictions and Struggles in Northern Ireland, Socialist Register . B&ICO . (1972a) Connolly and Partition (Athol Books) . B&ICO . (1972b) The Economics of Partition (Athol Books) . B&ICO . (1975a) The Two Irish Nations (Athol Books) . B&ICO . (1975b) Imperialism (Athol Books) . Cockburn, C . (1977) The Local State (Pluto Press) . Connolly, J . (1972) The Reconquest of Ireland (Dorset Press Ltd) . Connolly, J . (1973a) Selected writings . ed . P . Beresford Ellis . (Pelican Books) . Connolly, J . 1973b) Selected Political Writings ed . Owen Dudley and Bernard Ransom . (J. Cape Ltd) . de Paor, L . (1970) Divided Ulster (Pelican Books) . Emmanuel, A . (1972) Unequal Exchange (Monthly Review) . Farrell, M . (1976) Northern Ireland : The Orange State (Pluto Press) . Frank, A .G . (1971) Sociology of Development and The Underdevelopment of Sociology (Pluto Press) . Gibbon, P . (1975) The Origins of Ulster Unionism (Manchester University Press) . Hoogvelt, A . (1978) The Sociology of Developing Societies (Macmillan) . Lenin, V . (1973) On Britain (Lawrence & Wishart) . Lenin, V . (1978) Imperialism, the Highest Stage of Capitalism (Progress Publishers) . McCann, E . (1972) War and an Irish Town( Pluto Press) . Mandel, E . (1972) Marxist Economic Theory (Merlin Press) . Marx, K . and Engels, F . (1978) Ireland and The Irish Question (Lawrence & Wishart) . Nairn, T . (1981) The Break-up of Britain (NLB) . O'Dowd et al . (1980) Northern Ireland: Between Civil Rights and Civil War (CSE Books) . Patterson, H . (1980) Class Conflict and Sectariani sm : The Protestant Working Class and the Belfast Labour Movement, 1868-1920 (Blackstaff Press) . Probert, B . (1978) Beyond Orange and Green (Academy Press) . Rumpf, E . and Hepburn, A .C . (1977) Nationalism and Socialism in Twentieth Century Ireland (Liverpool University Press) . Smyth, J . (1980) Northern Ireland : Conflict without Class, in ,

N . IRELAND : MARXIST THOUGHT Morgan, A . and Purdie B . Solow, B . (1972) The Land Question and the Irish Economy, 18701903 (Harvard University Press) . White, J . (1975) Minority Report: The Protestant Community in the Irish Republic (Gill and Macmillan) . Whyte, J.H . (1978) Interpretations of the Northern Ireland Problem : An Appraisal Economic and Social Review, vol . 9 No .4 . Whyte, J .H . (1980) Church and State in Modern Ireland, 1923-1979, (Gill and Macmillan) .

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Liam O'Dowd, Bill Rolston and MikeTomlinson

From Labour to the Tories : The ideology of containment in Northern Ireland Bipartisanship : Containing the Crisis

last decade both Labour and Tory governments have gradually evolved a politics and ideology of `containment' in Northern Ireland . Initially this was not the result of carefully laid `Irish policies', but rather a series of ad hoc and partially planned responses to the threatened breakup of the Stormont statelet . Gradually, however, as Direct Rule has become more patterned and centralised, the outlines of `containment ' have become clearer and indeed have been crucial to the bipartisan policy . In this paper we attempt to assess the development of this policy under the Tories since 1979, with particular reference to its ideological aspects . The more general ideological separation of `politics' and `economics' has been given an Irish twist by bipartisanship . The `Northern Ireland problem' is seen as essentially political (and military) : this is what makes it distinctive . Economically, Northern Ireland is seen as unexceptional in British terms, albeit as one of the sicker limbs of the 'sickman of Europe' . There are many `political' analyses of Northern Ireland (see most recently the many, and frequently pessimistic, contributions in Rea, 1980), fewer of the `economic' crisis (see for example Morrissey, 1981) . Few relate the two elements, except in rather economistic terms, for example, estimating the effects of the `troubles' on unemployment (see Rowthorn, 1981) . The relationship of `politics' and `economics' is particularly sigOVER THE

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nificant in analysing Tory policy because it has attempted two apparently incompatible things at once . On the one hand, it has sought to separate `politics' from `economics' by reducing the role of the state in the economy ; on the other, it has linked `economic' policy to the politics of a revitalised British nationalism ; `getting the economy right' is fundamental to forging a new role for Britain internationally, based on national unity and social discipline at home and on `principle', efficiency and military strength abroad . It would be strange indeed if these departures did not affect the political and ideological management of Northern Ireland, raising new questions and contradictions in the policy of `containment' . For fifty years Partition insulated the Irish question from British politics, thus removing a potent threat to constitutional politics and parliamentry democracy (see O'Dowd et al, 1980) . The eruption in the North in the early 1970s threatened, but did not breach, this insulation in the long run . Having effected certain `reforms', both the Labour and Tory parties evolved a common Northern Ireland policy which rested on three main planks : a. continuous reiteration of the wish of the majority of the population to remain within the United Kingdom . This of course meant that the problem was an internal British one with no imperial or colonial dimensions ; the root of the `problem' was to be found exclusively b. within Northern Ireland in the intractable political division between Protestants and Catholics ; the British state is a neutral arbiter providing a framec. work for political agreement when the natives come to their senses . While Labour and the Tories disagreed on many points of emphasis in the final analysis they shared this ideology of `containment' . Significantly, perhaps, it was the military which provided the clearest formulation of this ideology . In the words of an ex-GOC, `a hard military casing' has to be maintained around Northern Ireland to contain the `explosive military mixture within, a mixture which will continue to exist into the foreseeable future more or less as before' (Hackett, 1979) . This has been refined considerably within Northern Ireland by attempts to confine the confict to ever smaller territorially delimited areas of Catholic disaffection . Of course, the ideology of containment allows for occasional eruptions which blow a hole in the `casing' . Thus, the Ulster Workers' Council strike of 1974, Paisley's protests, occasional large-scale bombing of soldiers and civilians (especially in Britain), the killing of famous people and the H Block hunger strikes, all affect the

N IRELAND : CONTAINMENT management of the `crisis', but do not challenge the principle of `containment', even if they indicate weaknesses in it . By contrast, plastic bullet deaths, the killing of policemen or civilians in Northern Ireland, scarcely rate a mention in the national United Kingdom media ; they demonstrate the success of 'containment' rather than its failure . There are other measures of its relative success . International criticism of the British government's management of the Northern Ireland conflict has been very muted, at least at government level . Periodically, intense criticism has surfaced, notably among Irish Americans and Southern Irish politicians, but these are exceptions which prove the rule . Perhaps even more significantly, there is a sense in which `containment', in the form of Direct Rule, has gained a minimal level of acceptance among the Catholic and Protestant population here as a `second best', or as a lesser evil than some alternative scenarios . This view has a material basis which becomes increasingly substantial as the United Kingdom state plays an ever more central role in the management of the local economy . Ironically, then, this `acceptance' is based to a large degree on the failure of the British state to insulate Northern Ireland from Great Britain at the level of day to day administration and the economy . The political parties within Northern Ireland see 'containment' differently, at least in their overt political ideology . For the Unionists the history of British `intervention' since the late 1960s has been one of appeasement, occasionally reversed or limited by Loyalist pressure . Thus, the suspension of Stormont, the refusal to accept the Loyalist Convention report (1975), Sunningdale, Anglo-Irish talks, a failure to implement draconian security policies (see Smyth, 1981), all amount to a policy of undermining the Unionist position and even the place of Northern Ireland within the United Kingdim . The SDLP (Social Democratic and Labour Party) on the other hand and the Irish (especially Fianna Fail) governments have tended to see `containment', particularly since Sunningdale, as a maintenace and even strengthening of the Unionist veto on a political settlement (see SDLP, 1980) . Republicans largely see it as a catalogue of repression of Catholic areas ; British policy is eptitomised by the army, police, Ulster Defence Regiment and prison officer. Nearly all local groupings are critical of government economic policy to the extent that they systematically concern themselves with public expenditure, unemployment, investment, etc . Yet criticism of economic policy alone is scarcely a basis for political consensus in a polarised society, and in any case is seen to be largely outside of local control . The

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fragmented nature of local response to British policy, outlined rather crudely above, is another important reason for the success of the bipartisan containment policy in that none of the alternatives seem viable . All of this is not to suggest that `containment' has simply frozen the Northern Ireland crisis, or that it has been merely `imposed' by British civil servants, generals and politicians . After all, the policy has some built-in constraints on British government action . Belfast is unlikely to be turned into another Beirut in order to `smash the terrorists' . Various British politicians would like an even greater degree of insulation of the Northern Ireland problem ; there are signs of the `contagion' spreading to Britain ; in addition, it does drain the British exchequer, albeit not to a dangerous degree .' The parameters of `containment' have been shaped by the struggle in Northern Ireland over the last fourteen years . The content and dynamics of British management constitute a more incoherent and complex process than that suggested by the above account . While the British government holds the levers of economic, political and military power in Northern Ireland, its policy has been influenced by the often contradictory pressures of local politicians, as well as by the IRA and loyalist paramilitaries . The question which this paper poses is whether Tory policy since 1979 has effected any change in the parameters or the content of `containment' .

Labour Direct Rule

In the short space of this article perhaps the best way of approaching an answer is by examining ideologies in the first instance . To addre the specificity of Tory management, it is useful to compare it with the preceding labour administration under Mason . The outlines of Mason's approach had their origins under the Rees adminstration since 1974 . The failure of Sunningdale and the Convention, largely due to paramilitary pressure and polarisation, had weakened Labour faith in constitutional solutions, and especially in selling any compromise settlement to the Protestant working class . On the other hand, neither talks with the IRA (under Whitelaw) or powersharing for the SDLP seemed to be delivering Catholic assent . Rees abolished special category status and began a process of criminalisation, carried on with gusto by Mason, which culminated in the H Block hunger strike . Likewise, there was a spectacular build-up of local and overwhelmingly Protestant security forces in a process termed 'Ulsterisation' : 10,955 indigenous security personnel in 1971 and 19,287 in 1980 (figures derived from Ulster Year Books for the period in question) . The other side of

N IRELAND : CONTAINMENT this policy was the attempt to bolster stability by economic initiatives to improve the employment prospects of both Catholic and Protestant working class. Examples of these included the setting up of Strathearn Audio in Catholic West Belfast (1974) and De Lorean (the former defunct, the latter practically so) and huge subsidisation of the shipyards . Indeed, Mason visited the shipyards immediately after the failure of Protestant workers to back the Paisley stoppage of 1977 in order to announce more government help . Mason formulated the new approach in the crudest and most direct terms . Revelling in the role of Northern Ireland `supremo', his aim was to make Direct Rule work . 'Unemployment ' and `terrorism' were designated as the two principal enemies . Northern Ireland Office (NIO) pronouncements were of two main kinds : on the one hand, there were the weekly tallies of `terrorist' arrests, sentences and arms discoveries, on the other, there were details fo industrial promotion trips abroad (of the `selling' of Northern Ireland), jobs promoted and jobs saved by governement policy . `We have created a package of financial inducements which is one of the best in Western Europe', boasted Mason in 1979 . He also claimed substantial progress in defeating `terrorism', his optimism perhaps dampened somewhat towards the end of his reign by the Provisionals' publication of the secret Document 37 in which the British Army noted the ability of the IRA to continue guerrilla operations for generations to come . In addition, Mason deplored the anachronistic and `irrelevant' squabbling of local politicans . Constitutional talks with these politicians were desultory and little prospect was held out for new initiatives. Instead, the Mason administration created a facade of regional corporatism . There were frequent consultations with the local branch of the CBI, the Northern Ireland Committee of the Irish Congress of Trade Unions and various pressure groups . All of this provided the climate for arguments about `parity' with the rest of the United Kingdom . Claims for equal wage levels and even equal levels of unemployment with the rest of the United Kingdom could be made and entertained at government level . Under Lord Melchett, one of Mason's ministers, funding for community action flowed, and legal reform in certain aspects of women's rights (although not gay rights, this having to wait for Tory legislation in the wake of a European Court of Human Rights decision in 1981) materialised in the form of the Matrimonial Causes Order (1978) and the Domestic Proceedings Order (1980) . Underlying the whole approach were substantial increases in public expenditure . The most direct result of this was

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a dramatic increase in public sector employment after 1974 . At a time when employment was declining in manufacturing and agriculture, public sector employment grew by over 23%, mainly in health and social services, education and the security forces . Much of the increase was in female (often part-time) employment ; by 1979 females in the public sector accounted for 47% of total female employment, compared with 28% of all males in civil employment . 56% of the expansion in male public sector employment in this six year period was accounted for by increases in the police and prison service (O'Dowd, 1982) . Although only 3% of the manufacturing workforce was in nationalised industries (Harland and Wolff, and Shorts) by 1979, 45% of employment in this sector was directly subsidised by government (NIEC, 1981 : 23) . This understates the dependence of private employment on state expenditure . The construction industry, for example, a key barometer of economic activity, is dominated by the self-employed and a large number of small companies . In 1981 60% of building arose directly from state expenditure and much of the remainder was indirectly influenced by it (NIEC, 1981 : 22) . Relatively stable under Labour, building employment fell dramatically between 1979 and 1982 as a result of Tory cuts . Under Rees and Mason, therefore, `containment' assumed a particular form, involving criminalisation, 'Ulsterisation' and relatively high levels of public expenditure on which the Northern Ireland economy became ever more dependent . In part this policy was a response to both the restructuring of the local economy and the political and military struggle . On another level, however, Mason represented a crude version of Labour economism . In a period when the Labour government was already being foced to implement cuts, Mason claimed to have won a good deal for Northern Ireland . For example, state expenditure on housing in the United Kindgom overall dropped by 25% between 1974/5 and 1979/80, wheras in Northern Ireland it rose by 36% in the same period . In treating Northern Ireland as a `special case', Mason could point to the supposed connection between unemployment and political violence (an argument later resurrected by Labour to explain Toxteth and Brixton) . He argued that unemployment reduced the possibility of an end to violence and a political settlment, a view shared most strongly by one of his `reformist' ministers, Lord Melchett . Yet the Mason administration alienated both the Northern Ireland nationalists and the Dublin government . It continuously asserted Northern Ireland's status as a `region' of the United Kingdom . Under pressure from Loyalists on security, Mason attacked the Republic over extradition and a

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lack of cooperation in the battle against `terrorism' . He even insisted on squiring the Queen on a visit to Northern Ireland to mark her `jubilee' . Yet, when Labour left office, unemployment in Northern Ireland had doubled, and the IRA remained undefeated and the basis had been laid for the H Block Crisis . The Mason period was to help precipitate a discussion in the Labour party on its Irish policy, especially as in several respects Mason's approach was indistinguishable from that of the Tory opposition, which found little to quibble about in his tough law and order approach and his commitment to Unionist consitutionalism .

The continuities and discontinuities became immediately clear with the appointment of Atkins as Secretary of State . The commitment to abiding by the majority's wishes to remain in the United Kingdom and to defeat `terrorism' was reiterated . Yet, in his first speech in Northern Ireland after his appointment (30 .5 .79 .) Atkins introduced a theme that was to be hammered home forcefully in ministers' statements in the preliminary phase of Tory Direct Rule (see statements of Shaw, 22 .11 .79 ; Atkins, 27 .3 .80 ; Rossi, 27 .3 .80 ; Rossi, 14 .5 .80 ; Rossi, 17 .11 .80 . ) 2 : Northern Ireland could not escape the harsh medicine of Tory cuts . In fact, Atkins redefined `parity with the rest of the United Kingdom' in just these terms, turning one of the themes of the Mason period into a two-edged sword . The full effects of this became clear when public sector employment in Northern Ireland began to fall in several areas, while remaining static in others (NIEC, 1981 : 40) . This reversed a trend apparent since the early 1960s at least, affecting the one employment growth area in Northern Ireland . As redundancies accelerated (15,000 in 1980, 23,500 in 1981 ; see NIEC 1982), unemployment reached new peaks with growing proportions of young people under twenty and of long-term unemployed . In another significant reversal of Mason's policies Atkins immediately initiated talks with local politicians on devolved government, although little was to emerge until Prior introduced his `rolling devloution' Bill in 1982 . The Tory administration began to emphasise the ideology of self-help and of less reliance on the state . The policy in Northern Ireland specifically, however, must first be assessed against the background of Tory ideology generally before examining its specific effects on `containment' policy in Northern Ireland . Since 1979 Thatcher has set out to smash the ideological consensus of post-war British politics . At its core, Tory ideology claims to have a formula for arresting and eventually

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reversing the `decline of Britain' . The Tories are not seeking to rebuild the Empire, but rather to create a new role for Britain, economically, politically and militarily, which fits the realities of the more diffuse imperialist world system in the late twentieth century . This policy is being pursued on two broad fronts firstly and principally between the `state' and the `economy', (that is, between `politics' and `economics') . Cuts in public spending and employment, the lifting or lessening of restrictions on capital, whether in respect of investment controls, urban planning laws or taxation, the privatisation of public services, the selling off of parts of nationalised industry, all reflect the policy of `lessening the involvement of the state' . The aim is to make Britain `competitive' again in the context of newly restructured global capitalist economy . The second element in the policy is, rather ironically perhaps, the creation of a `strong state', based on law and order at home and a strong defence profile within a new military division of labour abroad . These two sometimes contradictory aims are however reconciled at the ideological level, through the promulgation of what has been termed an authoritarian populism . The Tories have developed a modernised version of British nationalism rooted in `national unity and sovereignty' which has helped to relegate internal Labour debates on an alternative programme to something of a popular sideshow . The renewed sense of national purpose advanced is based on a need for `social discipline' . In economic policy, mass unemployment has been the central instrument of discipline,' helped by rigid pay policies in the public sector and `cash limits' . Here the trade unions have been designated as `principal enemies' of Britain's economic recovery . On the second front, a whole barrage of laws and practices have been instituted to police sections of the population who might threaten law and order at home . These groups range from young blacks (through the Criminal Justice Act), the unemployed (through taxing of unemployment benefit), workers (through legislation on strikes, closed shops, etc . ), to youth generally (through training programmes and detention centres) . For the Tories, however, the `terrorist' typifies the most extreme threat to law and order, although little new was required in terms of anti-terrorist legislation . Abroad, a new image of a strong Britain was portrayed . At one level Thatcher insisted on standing up for Britain's rights in the EEC, on another she proclaimed the necessity of standing up to the Russians by modernising Britain's 'independent' nuclear deterrent . This strong defence policy has been legitimised by demonstrations of British power and efficiency . These prove that Britain is the leading exponent of counter-

N IRELAND : CONTAINMENT insurgency and special elite forces, as shown by the SAS who can smash embassy sieges or plane hijackings at home while helping foreign governments to do the same . Similarly the `Falklands' showed that Beritish sea power can still rule the waves, at least in the South Atlantic . Meanwhile, the more rigorous side of a national unity, based on efficiency and discipline, is softened by the new lease of life given to Royalism by royal jubilees, marriages and births . The new monarchism is only strengthened by periodic threats to royal security which constitute morality tableaux about the need to strengthen law and order generally . It is not just the content of the new Tory ideology which is important, however, but also the way in which it is promulgated . The mode is confrontationist . Ideology is publicised through a series of confrontations with the trade unions (especially trade union leaders), strikers, `terrorists', with the EEC or with the Argentinians . An image of consistency and adherence to principle in the national interest is developed in contradistinction to the vacillation and temporising of post-war British governments . The Tories claim to be on the popular side against small, unrepresentative groups at home, or forces abroad, which challenge the `national interst' . This may even mean foregoing short-term `political' popularity in the interest of long-term economic and political recovery . Importantly, however, the Tory version of British nationalism is far from a mere `fortress Britain' mentality . It explicitly recognised that the national government cannot control the forces of international capital, but rather must accommodate to it within a framework of national unity and social discipline . The shift in ideological management by the Tories would seem, on the surface at least, to potentially threaten bipartisan `containment' policy in Northern Ireland . Yet Northern Ireland as such accounted for relatively little in Tory ideology, except in one major respect . Northern Ireland trade unions, rendered ineffectual by long-term unemployment, the continual threat of more, and a membership divided on sectarian lines, did not constitute a plausible `enemy' for Tory Direct Rulers . The exception was the IRA . The hunger strike provided an ideal setpiece for Thatcher, where, despite the wavering of some of her ministers and intense international pressure, she faced down the `terrorist' demands . Yet, in general, the Tories merely continued Mason's security policies . There were some significant shifts, however, in political and economic management which reflected broader Tory policy . Cuts in public expenditure were linked to a renewed search for devolved government . One of the characteristics of Tory policy C&C 18 - F

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has been the ideological effort expended in `decentralising' responsibility for government cuts away from central government to local government and various state agencies . In this sense, a vaccum existed in Northern Ireland ; there was no locally elected administration to take responsibility . This posed a problem given the likely (short-term?) effects on the local economy and the high level of criticism (albeit conflicting) of Direct Rule anyway . Furthermore, Tory ideology seemed to fit badly with the centralisation and bureaucracy of Direct Rule . While the election manifesto of the Tories promised more powers for local authorities in the North, the blatent sectarianism of these bodies precluded this option . The alternative was to go for a revised form of devolved government . In the process of implementing this policy, the Tories have gradually come to reverse the relationship which the Mason administration posited between `economics' and 'politics' . To Labour's two dominant issues - the economy and `terrorism'- Prior has added another : `the necessity for political progress' . In fact, political progress is a prerequisite for progress on all fronts . ` . . .the defeat of terrorism, the recovery of the economy and the establishment of effective political institutions go together and support one another . An end to the political deadlock of recent years offers the best hope of a sustained improvement in the economy and in security' (Prior, 5 .4 .82 .) This emphasis has the merit of fitting in with the Tory ideology of self-help in the economic sphere while manifesting a recurrent theme of Direct Rule : the Northern Ireland problem is `your own fault' exclusively . At a more specific level, whereas Mason saw local politicians as a luxury the province could not afford in the short term - consulting with unions, employers and pressure groups instead - Prior has droped the facade of regional corporatism with the exception of his relationship with the NIEC (Northern Ireland Economic Council') . It would be difficult, for example, to imagine Prior mobilising trade union support against Paisley in the way that Mason attempted during the 1977 protests . While `regional corporatism' is dropped, the Tories have encouraged a type of `micro corporatism' based on local areas . Thus Enterprise Carrickfergus, Enterprise Lisburn, and, most optimistically of all, Enterprise Strabane are praised by ministers . Thus, it suits Adam Butler (16 .2 .82) to imply that these exercises in self-help can reverse a process of decline reflected in the loss of over 2,000 synethetic fibres jobs in Carrickfergus and a 47% male unemployment rate in Strabane . Another example of this approach is represented by Belfast's Enterprise Zone (one of

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eleven in the United Kingdom), although here the unions have been reluctant to participate in the experiment, describing the policy as `papering over the parlour when the house is falling down' (John Freeman' cited in Belfast Telegraph, 25 .10 .80 .)' As regards unemployment the record is disastrous, with over 20,000 jobs lost in manufacturing alone in 1981 (see Belfast Bulletin, 1982) and only 3,700 jobs `promoted' in the same year, significantly only 350 of them arising from inward investment (NIEC, 1982 : 9) . In addition, the upsurge of jobs arising out of American investment (predicted in 1978 after a seven year lull in investment from that source) now looks decidedly shaky, with the demise of the De Lorean spectacular and questions surrounding the new Lear Far jet operation, which promised over 1,000 jobs . The Tories' response, as well as stressing the need to `improve Northern Ireland's image abroad" and to reach a political settlement, has been to restructure the industrial development bodies under a new Industrial Development Board (IDB) loosely modelled on the Southern Irish Industrial Development Authority . Under the managment of Saxon Tate, who as vice-chairman of Tate and Lyle has had more of a reputation for lay-offs than job creation in the recent past, the IDB pursues a problematic role . The contradictions of `job promotion' in Northern Ireland have been illustrated recently by the success of the Republic in attracting the Hyster Company (manufacturers of fork lift trucks) to Dublin even though the company already has one successful plant in Cragavon, an executive (Herman Steepman, managinig director of the Cragavon plant) on the newlyformed IDB, and was under strong pressure to locate in Antrim to replace the now-closed British Enkalon factory . Also indicative of Tory management is the fact that, despite the policy of no help for lame ducks, Prior has continued to subsidise the shipyards with their overwhelmingly Protestant workforce . With few orders and heavy losses it accounts for 25% of all Department of Commerce expenditure in the current financial year . It survives as `the symbol of industrial Belfast' (Prior, 12 .5 .82 .), a euphemism which would not be lost on working class Catholics who have long seen it as a bastion of Protestant privilege .

The above account of Tory management in Northern Ireland is not to be construed, however, as something simply imposed by the NIO . Rather, it is in part a reaction to local pressures . While it has maintained the `containment' policy, it has done so with emphases significantly different from that of Labour . At

Local Pressures

84

times both local pressures and the new emphases have posed serious contradictions for the containment itself . At the ideological level, the hunger strikes posed the most serious challenge to `containment' . Although the outcome was generally to Thatcher's satisfaction, the issue was often in doubt . Here the battle ground was principally in two areas never sympathetic to British `containment' policy : Irish America and the Irish Republic . In the former, the propaganda struggle was so intense that the local Controller of BBC Northern Ireland complained of the unwillingness of NIO officials to contribute to broadcasts on the subject . `They were broadcasting to America - under pressure . They were briefing American and foreign journalists . They were not briefing home journalists' (Hawthorne, 1981 : 12) Ulster Commentary, a long-standing government publication on business and politics, was discontinued and its staff transferred to producing Fact Sheets on the `dangerous criminals' in H Blocks .' Of course, American propaganda was a two-edged sword ; as Prior was to recognise later, it did little to encourage the American investor (now the only major source of potential foreign investment) to come to Northern Ireland . Yet, for a time everyone was on the American trail, released H

N IRELAND : CONTAINMENT Blocks protestors, Loyalist politicians and NIO officials, in effect internationalising the Northern Ireland problem in a way especially inimical to the `containment' policy . The problem of the Irish Republic was different . Irish governments had become increasingly critical of the failure of successive British administrations to restore some form of power-sharing . In part, apparently foreseeing the developing H Blocks crisis, and in part seeing cross-border economic cooperation as a palliative to the Northern Ireland economic crisis, Thatcher embarked on the Anglo-Irish summits with Haughey . They proved to be exercises in sustained ambiguity, delivering little in the way of institutionalised cooperation . The gains for the Tory government were considerable, however . Internationally, they conveyed the impression of cooperation between the British and Irish governments in solving the Northern Ireland question . Haughey, in his own political self interest, committed to reading more into the process than was there, was effectively neutralised (perhaps willingly to some extent) on the H Block issue . Cross-border security was tightened further and some small-scale cooperation over energy and joint EEC schemes (especially in the area of tourism) were negotiated . At all times, however, the process seemed compatible with the new-style nationalism being propagated by the Tories . As in the `Falklands' crisis, Thatcher was willing to engage the cooperation of other states (in this case the Irish Republic) in confirming British sovereignty in a disputed area .' The agreements were explicitly not between North and South 9 , but between the United Kingdom, `all 56 million of us' (to quote Allison, 27 .4 .81 .), and the Irish Republic . On another level, it recognised the utility of inter-governmental cooperation in an island often seen by transnational organisations, like the EEC and large corporations, as a single geographical unit . There were also some contradictory elements in the process, however . It encouraged both the Irish government and the SDLP to press for further recognition that Northern Ireland was not merely an internal British problem or containable within the confines of Northern Ireland itself . The SDLP in any case had become incresingly disenchaned with the prospects for a return of powersharing, given Unionist opposition and what they saw as an increasingly pro-Unionist policy within the North . The failure of the Anglo-Irish agreements to deliver anything tangible to non-Unionists is implicitly recognised in the possibility that the whole spectrum from the Provisionals to the SDLP may boycott the new assembly proposed by Prior . (This in turn suggests that the Irish govern-

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ment and SDLP hopes of outflanking the Provisionals via the Anglo-Irish agreements has failed .) These proposals contain no required powersharing, no Council of Ireland, and appear mainly directed to avoid setting up a firm target for Unionists (particularly Paisley) to attack . Thus, Prior guarantees no concrete concessions to constitutional nationalists, although clearly he would prefer to avoid antagonising them in pursuance of the long-term aim of marginalising the Provisionals . 10 The Unionists have always been among the strongest supporters of `containment' insofar as it involved treating Northern Ireland as an internal British problem . (They largely reject, of course, the other two elements of `containment', the `political primacy' of Catholic/Protestant division and the `neutrality' of the British state .) They have been divided on the degree of power which should be devolved to Northern Ireland and on the precise measures that should be implemented to smash the Provisionals and exclude the `enemies of state' from `high places' . Furthermore, the Democratic Unionist Party (DUP) in particular has a rather different conception of the relationship of politics and economics than that contained in the new Tory ideology . For them, every question is reducible to its potentiality for undermining the `Protestant' dominance of Northern Ireland . Thus, the Anglo-Irish summits were attacked by Paisley in his `Carson Trail' protests as a conspiracy and a sell-out of Protestant interests . In addition, he favours Israelitype raids into the Irish Republic rather than cross-border legal and security force cooperation . Even the choice between a cross-border gas pipeline and a connection with North Sea gas (via Scotland) is portrayed as a choice between strengthening and weakening the Union . In the continuing sharp battle between Paisley of the DUP and Molyneaux of the Official Unionist Party (OUP) for political control of Unionism (what Hume of the SDLP has termed their `virility contest for control of the Unionist family') Paisley follows the line of conditional loyalty to the British Parlkiament, a policy which allows him scope to criticise the whole range of government policy from `security' to the `economy' . In this he has the support of a devolutionist wing of the OUP, who nevertheless disagree with his methods . The dominant wing of the OUP, however, led by Molyneaux, Powell and Smyth, see devolution as giving the game to Paisley, and accordingly weakening the link . Thus, they favour `integration' with the United Kingdom : `Ulster should be treated like Lancashire' . In this they have been increasingly supported by the right wing of the Tory Party, and perhaps by Thatcher herself behind the scenes . Furthermore, many of them are convinced of the correctness of the Tories'

N IRELAND : CONTAINMENT economic policy, even if it has done little for Northern Ireland . There is an echo here of the class divisions in Unionism . The OUP leaders fear the economic-political consequences of Paisley-style populism . They recognise that the coherence of Northern Ireland's traditional industrial base is gone for ever and that a semi-autonomous Northern Ireland dominated by Paisley would be beleagured economically and politically . Despite their support for `containment' in some respects, Unionists have been reluctantly forced to recognise the periodic internationalising of the Northern Ireland problem . Although opposed to the EEC in principle, for example, they have been forced to recognise it as a source of funds, even funds jointly administered by British and Irish governments . They have also been forced to debate the use of plastic bullets in the European Parliament, a long step from their successful policy of precluding discussion of the internal affairs of Northern Ireland in the British Parliament until the late 1960s! The OUP have appealed to both the European Court of Human Rights and Amnesty International on behalf of Loyalist rights to `security', although these have been rather pale shadows of similar Republican moves . Various elements within Unionism favour cross-border cooperation, provided it is non-institutionalised and confined to economic and security matters, although they are always open to attacks from Paisley for consorting with `enemies of the state' . `Modernising' Unionists, however, such as Craig and McCartney, are even prepared to go a bit further and encourage Garrett Fitzgerald's version of Anglo-Irish cooperation, provided it strengthens the position of Northern Ireland within the United Kingdom . At the ideological level, one of the main strengths of `modernising' unionism is that it appears to fit well with Thatcherism . Her authoritarian populism strikes a responsive chord in Orange populism with its commitment to a `Great' Britain, and a strong state, united against its enemies, suffused with popular adulation of the monarchy . Prior and Gowrie's recognition of the existence of Irish nationalist aspirations in Northern Ireland can even be swallowed by right wing Tories and Official Unionists, if nationalism's militant expression is crushed and its `political expression' is permanently denied access to real political power .

Translated to Northern Ireland, Tory authoritarian populism becomes a sectararian populism of sorts . It is somewhat removed from Paisley's variety in that the latter incroporates elements of rather archaic anti-popery and a willingness to

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raise private `armies' to enforce `the Queen's writ' . Nevertheless, in many respects Tory ideology in Northern Ireland welds together elements of Paisleyism and Official Unionism . After all, local security is increasingly in the hands of a Protestant police force and Ulster Defence Regiment, the Ulster Defence Association (the largest Loyalist paramilitary group) remains unproscribed, enforced powersharing and imposed cross-border political links appear to be off the agenda . The basis for this policy was laid under the Mason administration, although under the Tories it has been tied to a revitalised British nationalism which is adding new political and ideological dimensions to sectarian divisions in Northern Ireland . The contradictions are sharper than under Labour, however, when sectarian division was being modernised and refurbished in a period of growing state intervention and public expenditure behind an exaggerated rhetoric of Labourism . Under the Tories `containment' is pursued in a context of contraction in both the public and private sectors . Ironically, this means reducing the British state's direct contribution to the Northern Ireland economy at a time when British unity is being stressed . It is a point which does not escape the Paisley wing of Unionism and, combined with exercises in `international cooperation' with the Irish Republic, lends credence to his doctrine of `conditional loyalty' . Although Labour Direct Rule presided over a rapidly declining industrial base, the fully-fledged Tory policy of `making Britiain competitive' has even more disastrous implications for a local economy with over 120,000 unemployed (22%) : more than the total left in manufacturing industry . The Northern Ireland economy is now more `open' than ever before with the contraction of agricultural employment and the collapse of local capital . The accelerating dynamics of international capital is mirrored in the fact that the Northern Ireland linen industry lasted for two hundred years, the synethic fibres industry for twenty and De Lorean for two . `Containment' certainly lacks a neat economic basis . While we have detailed here its ideological success, it must be recognised that the success is not total ; there is what might be called seepage at several points . There is a sense, for example, in which Northern Ireland has become a laboratory for the `strong state' - a series of trials for dealing with political dissent . The Northern Ireland crisis has already prompted significant erosions of civil liberties in both Britain and the Irish Republic, not to mention Northern Ireland itself (see Rolston and Tomlinson, 1982) . The effects within Northern Ireland are even more far-

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reaching . Ten years of Direct Rule, informed by Labour and

Tory versions

of 'containment', has presided over 2,500 deaths,

an unparalleled depth of sectarian division and repression, a series of failed constitutional experiments, an unprecedented unemployment rate, and the first decennial decline in population since the late nineteenth century, due to mass emigration . It is surely time for a fundamental reappraisal of 'containment', a policy which has served the stability of British (and possibly Southern Irish) politics well, but has failed miserably to address the visions enshrined at the root of the Northern Ireland statelet .

1 . The cost should not be underestimated, however. One measure of it, chosen at random, is that between 1971 and 1978£34,981,578 was paid out by the NIO in criminal injury claims arising from the 'troubles', and £234,487,561 in criminal damage claims (figures from Ulster Year Books for the years in question) . Quotations from NIO ministers are from the daily press releases 2. supplied by the Northern Ireland Information Service at Stormont . The date of the press release is given here in each case . Talking of wage claims by workers in Northern Ireland, Adam 3. Butler said (25 .1 .82) : 'Of course, one of the consequences of high unemploymnet is that the importance of having a job ranks more highly in a man's consideration . Hopefully the prospect of retaining that job, and the need to ensure more jobs for future generations, will weigh heavily with him in contemplating present action' . 4. The Northern Ireland Economic Council is a consultative body made up of employers, trade unionists and civil servants . It is the only regular source of published comment and analysis on the Northern Ireland economy . By and large, it has been critical of Tory economic policy and has questioned Tory claims that public expenditure in Northern Ireland is over 30% higher on average than in Britain . 5. The government has just announced the prospective establishment of a second Enterprise Zone in Northern Ireland, this time in an as yet unspecified area west of the Bann . 6. ' . . .the activities df the paramilitaries, and indeed the recent tensions created by extremist politicans on both sides of the sectarian divide, have made it very difficult to attract such (inward) investment . Unless we can improve the image of the province, or until the province takes its own image into its own hands, ordinary men and women in Northern Ireland will continue to lose their jobs" (Lord Gowrie, 11 .2 .82 .)

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7. In addition the NIO staff were busy churning out booklets for foreign consumption, such as H Blocks : the Reality (1980), H Blocks: the Facts (1980), Day to Day Life in Northern Ireland Prisons (1981) and H Blocks : What the Papers Say (1981) and the Foreign Office invested over f100,000 in an hour-long documentary purporting to tell the 'real facts' of Northern Ireland to Northern American audiences . 8. Her degree of success in gaining Haughey's acquiescence on Northern Ireland made her all the more irritated when he stepped out of line on the :'Falklands' crisis itself . Haughey's action here may be read as evidence of the Irish government's growing disenchantment with the Anglo-Irish process, a fact confirmed by parliamentary statements and ministerial summonses in July 1982 . 9. Gowrie is the only NIO minister who referred to 'cross-border' or 'North-South' cooperation ; see for example, 5 .5 .82 . 10 . The Prior administration, and notably Lord Growrie, himself an Irish citizen, has been more explicit in recognizing the two traditions in Northern Ireland . This recognition has been largely rhetorical, however, and has masked pro-Unionist moves on a practical political level .

References Hackett, General Sir J . (1979) 'Containing the Explosive Mixture', Hibernia, 9 .8 .79 . Hawthorne, J . (1981) Reporting Violence : Lessons from Northern Ireland, ,(BBC) Morrissey, M . (1981) 'Economic Change and Political Strategy in Northern Ireland', Economic Bulletin, 8 NIEC, (1981) Employment Patterns in Northern Ireland, 1950-1980, Report 23 NIEC, (1982) Economic Assessment, Report 28 O'Dowd, L . (1982) 'Regionalism and Social Change in Northern Ireland', in Kelly, M ; O'Dowd, L ; Wickham, J (eds) Power, Conflict and Inequality, (Turoe Press/Marion Boyars forthcoming) O'Dowd, L ; Rolston, B ; Tomlinson, M . (1980) Northern Ireland : Between Civil Rights and Civil War, (CSE Books) Rea, D . (ed) (1982) Political Cooperation in Divided Societies, (Gill and Macmillan) Rolston, B ; Tomlinson, M. (1982) . Spectators at the "Carnival of Reaction"? Analysing Political Crime in Ireland', in Kelly, M et al (eds), op cit. Rowthorn, B . (1981) 'Northern Ireland : An Economy in Crisis', Cambridge Journal of Economics, 5(1) SDLP, (1980) Local Government in Northern Ireland : a Portrait of Future Regional Government?, Belfast, February Smyth, C . (1981) 'Counting the Cost of Paisley Politics', Irish Times, 21 .11 .81 .

Willi Semmler

Theories of competition and monopoly A NUMBER of US Marxists characterise the contemporary stage

of capitalism as that of monopoly capitalism . These analysts, including Baran, Sweezy, Steindl, O'Connor and Sherman, distinguish between two stages of capitalist development : the stage of free competition and the stage of monopoly capitalism . They maintain that competitive capitalism revealed an inherent tendency towards the formation of monopolies at the end of the 19th Century as evidenced by the growth of large units of capital . Monopolies are now a general phenomenon (see Baran/ Sweezy 1966, p18) . The market prices of monopolised commodities were raised and `the equal profit rates of competitive captialism (were) turned into a hierarchy of profit rates, highest in the most completely monopolised industries, the lowest in the most competitive', (Sweezy, 1968, p285) . From these observations the theorists of monopoly capitalism conclude, first, that the law of value as a law of regulation of exchange values in competitive capitalism is no longer valid . They argue that monopoly prices cannot be derived from values as was previously possible (Sweezy, 1979) . Accordingly, prices become an arbitrary phenomenon and the law of value is valid only for the economy as a whole . For prices a law no longer exists . Or, as Sweezy expresses it : `No reasonably general laws of monopoly price have been discovered because none exist' . (Sweezy 1970, p271) . The second conclusion is that

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monopoly prices and a hierarchy of profit rates between monopolised and non-monopolised industries, or between large and small firms, lead to stagnation and increasing instability in the monopoly stage of capitalism . This view of contemporary capitalism has become very popular, especially since the publication of Baran and Sweezy's book, `Monopoly Capital' in the 1960s . However, many other Marxists have felt that the notions of competition and monopoly used by these authors are based more on the orthodox theory of perfect/imperfect competition than on the notions of competition worked out by Marx in his economic writings . As a result the following questions have been raised : • Have the theories of monopoly capitalism correctly interpreted the Marxist (and the classical) notion of competition and can 20th Century Capitalism be adequately interpreted as `a stage of monopoly capitalism'? • Is it correct to refer to writers who followed Marx, such as Lenin, Hilferding, Bucharin and Varga, as the forerunners of the theory of monopoly capitalism, or does this neglect important streams of thinking in Marxist theory? • Is there sufficient empirical evidence of monopoly prices persistently above prices of production and a persistent hierarchy of profit rates, to support their position? • If differential profit rates between or within industries really exist can they not be explained on the basis of the classical and Marx's own theory of competition? Is a new framework really necessary? • Don't we need to distinguish between the notion of monopoly, which refers to market power, and the socioeconomic power of large units of capital (or in other terms between monopoly power and corporate power?) In the first part of this paper I will compare the neoclassical and classical theories of competition with Marx's own theory and that of Marxist writers that followed him . In the second part, I will discuss the empirical evidence on monopoly prices, monopoly profit rates and a hierarchy of profit rates . The third part asks whether the empirical `fact' of differential profit rates contradicts the theoretical position of classical and Marxist political economy . In the last part of the paper, I will return to the difference between so called `monopoly power' and `the power of large units of capital' .

Neoclassical Theory

Neoclassical economists often consider the classical theorists to be the founders of neoclassical general competitive analysis, (Arrow/Hahn 1971, p2, and Stigler 1957) . There are of course

COMPETITION AND MONOPOLY some elements in classical theory, particularly in Smith's work The Wealth of Nations, which lend themselves to the neoclassical conception of economic life (see Smith 1974, Chapter VII) . Competition in Smith's sense meant `free competition' : everyone should act according to their self interests . There should be no barriers to economic activities . The market is the place where individuals and their interests are co-ordinated and disturbances eliminated . The fundamental mechanism that produces an efficient allocation of resources is the supply and demand mechanism . Moreover, this mechanism is considered to be the only economic institution that can guarantee freedom, equality and justice for the individual . Neoclassical writers extended this aspect of Smith's theory of a market system by formulating several conditions under which efficient resource allocation and an optimum level of social welfare would be realised . The main conditions necessary for a perfectly working competitive market system are seen as : profit maximising producers and utility maximising consumers ; a sufficiently large number of market agents ; no externalities among their activities ; perfect mobility of resources between industries ; and perfect foresight . Given these preconditions the competitive process guarantees that prices converge towards equilibrium prices . This allows a continuing exchange of commodities between market participants . Not only is the existence of equilibrium prices guaranteed by the market system, but the elimination of disturbances and an optimal allocation of resources is brought about by competition . These characteristics of the standard neoclassical view of competition require some qualification . First, this theory of competition can be seen as a `quantity theory of competition' . (Weeks, 1978) . The intensity of competition in the market, for example, among producers, is measured by the quantity of firms in the industry . It is assumed that the larger the number of firms the closer to the optimum level the results will be . Second, a central and major assumption is that prices and quantities converge towards an equilibrium driven by competitive forces . Disequilibrium between supply and demand will be eliminated by price and quantity reactions and exogenous distortions of the market mechanisms will disappear in the course of time . A change in the technique used by producers and a change in their structure will, after a short adjustment time, lead to a new competitive equilibrium . Equilibrium will not be brought about by a violent equalisation of disequilibrium (by a crisis, Marx assumed) but is a result of a continuous and smooth process of convergence . A third

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COMPETITION AND MONOPOLY characteristic of the neoclassical view is the exclusion of uncertainty, risk and expectation - all factors which are very important elements in the capitalist mode of production . Once these idealised market conditions are accepted as prerequisities for perfect competition and the achievement of a social welfare optimum, deviations can consequently be considered as leading to `imperfect', `restricted' or 'monopolisitc' competition . Deviations are caused by (1) industrial concentration which allows a greater share of the market for leading firms, (2) coalitions, agreements and collusion among participants in the market, and (3) a limited mobility of resources between different industries (market entry and exit barriers) . All three factors allow leading firms to influence prices and quantities by witholding production and raising prices . Thus once the theory of perfect competition is accepted, the notion of monopoly or oligopoly power is determined in advance by the assumptions and treated as an anomaly . Deviations from `competitive prices' and the existence of differential profit rates are then left to be accounted for by a theory of `imperfect competition' .

Although neo-classical economists trace their theoretical roots back to Smith, classical political economy (Smith, Ricardo) developed a notion of competition and long-run equilibrium that is different from the neoclassical theory of perfect competition . The main features of classical political economy are the concept of reproduction and social surplus, a concept of a centre of gravity for market prices, and a particular notion of `equilibrium' . These three features are closely related to the particular concept of competition found in classical political economy . Classical political economy assumed that once the technical conditions of production (i .e . the real wage and workers per unit of output) are given, the system of production generates a surplus product that can be distributed among the remaining classes of society . Since in classical theory workers' consumption is regarded as a necessary part of the social reproduction, the surplus is defined as : Surplus product = social product - (replacement of means of production + necessary consumption) . Competition determines the distribution of the surplus product, not the size of it . The values of commodities are seen as determined by their costs of reproduction . The costs of reproduction of commodities are the centre of gravity for market prices, around which actual prices fluctuate . Adam Smith called this centre of gravity natural prices . These are composed of the rewards of

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the factors of production (wages, profits, and rent) . The natural prices of commodities and factors of production, in Smith's sense, which together form the centre of gravity for the movement of market prices, are independent of supply and demand . Natural prices are the long-run effects of competition, which, according to Smith, determine `the natural employment of each factor of production' . It is assumed that rates of return on factors of production are equalised as a result of the tendency of factors to move from areas of low to high returns . Assuming equalised prices of production and abstracting from the existence of landed property, Smith's natural prices may be expressed as vertically integrated wages and profits . Thus we can write the price of the commodity i as : pi = wi + rri, where wi and rri are the vertically integrated wages and profits . This is also called the adding up theory of prices . Relative prices are then given by the following relation : Pi _ wi + 'rri Pj wj + rrj For Ricardo, the centre of gravity for market prices is determined by the direct and indirect labour required for the production of commodities . Relative prices are thus considered to be a function of the labour embodied in the commodities . We can express this price determination in the following way : Pt = f (,` r ) PJ where Ai, .\

J

AJ

represent the labour embodied in the com-

modities, (Shaikh 1976) . Ricardo, especially in his later writings, also analysed how relative prices are influenced by changes in the distribution of income between labour and capital . This labour embodied theory was a good first approximation of a theory of value and of the determination of a centre of gravity for market prices . However, the classical theory of price determination should not be interpreted as one containing an equilibrium price in the sense of the general equilibrium theory . It is a centre around which actual prices (market prices) fluctuate . It is not assumed that prices react to excess supply and demand and converge on an equilibrium . Classical political economy sees prices as being determined by two elements (Deleplace 1981) . Firstly, natural prices determine the centres of gravity around which market prices fluctuate . Then, secondly, supply and demand (the only law that is fundamental in neo-classical economics) determine the

COMPETITION AND MONOPOLY fluctuations . This latter element plays a lesser role in classical theory than in modern competitive equilibrium theory . Demand and supply, like other forces (e .g . random events, speculation, restricted mobility of capital or temporary monopolies), cause deviations from the centre, but they do not determine the centre of gravity itself . It is the failure to grasp this two step process found in classical economics that marks the neoclassical theory of competition and price formation .

Compared with Smith and Ricardo, Marx had a very much more elaborate and differentiated concept of competition . For Marx competition is the result of the self-expansion of capital and is related not only to the circulation of commodities but also to production, realisation and distribution of surplus value . In production the result of competition between capitals is to produce surplus value . In circulation, competition of capitals means extending the market share and improving the conditions of realisation of surplus value . Competition between different sectors of capital is related to the distribution of surplus value and tends to equalise rates of profit across all sectors . For Marx, the regulating centres for market prices are prices of production, given by (1 + -rr) (c + v), where c and v represent constant and variable capital, and rr the average rate of profit . Since prices of production can be derived from values, market prices are in the last instance regulated by socially necessary labour time . For Marx competition has two distinct tasks, that of equalising prices within sectors which leads to the emergence of different rates of profit within them, and that of promoting the mobility of capital so as to form an average rate of profit across different sectors . Competition does not bring about a smooth process of adjustment and convergence toward equilibrium prices, but disequilibria and deviations from the centre of gravity . Within each industry we can see the existence of differential rates of profit because of the deviation of market prices from prices of production, following from the fact that production techniques are not the same for all firms in an industry . Firms with better techniques can capture surplus profits . Thus within a single industrial sector, differential profit rates are quite normal and the existence of differential profit rates does not contradict Marx's theory of competition . They do not imply, nor are they identical with, `decreasing competition', `imperfect competition' or monopoly power . Competition between capitals also means that market prices are regulated by prices of production and the actual C&C18-G

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profit rates are regulated by the social average . Whereas differential profit rates among capitals within one industry always exist without any tendency towards equalisation of profit rates, the question arises as to how long it will take for market prices to adjust towards prices of production . Another related question is how long it will take for industry profit rates above or below average to disappear and approach the social average rate of profit . Marx's answer is that the time required to adjust supply to demand, market prices to prices of production, and profit rates to the social average, depends on the concrete conditions of production and circulation of commodities . The time required to build up new capacity in industries where the profit rate is above average, to withdraw money capital from fields of employment with low profit rates, to produce and circulate commodities - that is the turnover time of capital - is different in each industry . The amount of capital that is necessary to produce at the socially necessary cost of production also differs between industries . At one level restrictions on the mobility of capital can be overcome by the credit system, but they nevertheless exist and are different in each industry . In Marx's theory, these restrictions on capital and mobility inhibit the tendency towards equalisation of profit rates between sectors . Thus, supply and demand may play a certain role in the formation of differential profit rates . For example, the demand for a commodity increases and the commodity cannot be reproduced immediately - as a result the market price will rise above the price of production and an above average profit rate will appear . Marx then did not assume that profit rates will be equalised in all spheres of production . The process of competition between capitals produces differential profit rates as well as an equalisation tendency . As Marx puts it : ' . . . the average rate of profit does not obtain as a directly established fact, but rather is to be determined as an end result of the equalisation of opposite fluctuations', (Marx, Capital Vol III, p368) . Within the general body of his theory, Marx thus analyses three main causes of differential profit rates . The first arises from the differences of productivity of different capitals within an industry, leading to the emergence of surplus profits for more efficient capitals and lower profits for the least efficient capitals . The second occurs when access to the conditions of production is restricted and the entry of new capital, or the exit of old established capitals, is limited . The third arises as a result of disequilibrium of supply and demand .

COMPETITION AND MONOPOLY In the literature which develops a theory of two stages of capitalist development three causes are posited as the reasons for the genesis of monopoly capitalism and monopoly profits : the concentration of production within industries (combined with centralising of capital across industries), increasing constraints on the mobility of capital because of a high proportion of fixed capital in certain sectors, and the collusive behaviour of corporations and trusts . In the last quarter of the 19th century Engels was already describing the genesis of trusts and corporations in European countries . But Hilferding was the first Marxist to systematically analyse the changing character of capitalism when, in his book, Finance Capital, he posited that increasing concentration in production and circulation, together with the formation of trusts and cartels, marked out a new stage for capitalism . At the same time he analysed in detail the barriers to capital mobility across industries, arguing that increasing organic composition and the accumulation of fixed capital were the most important . As he saw it, competition was decreasing because competition between big capital encouraged collusion and the formation of cartels through which the production and distribution of income became organised . He saw national cartels as being unstable, for they would be overcome by trusts and cartels operating on a world scale . In this way, according to Hilferding, the laws of motion of capitalism are replaced by regulation . Power becomes the dominant force in the economy . Concentraton, entry barriers, and collusion result in monopoly prices, monopoly profits, and disruption of the tendency towards equalisation of profit rates . Marx's theories of competition and differential profit rates are no longer discussed . They are regarded as obsolete . Lenin (1965), by referring to the empirical results of Hilferding, also analysed the replacement of free by monopoly competition . He, however, considered the capitalist mode of production as one of self-expansion and accumulation of capital . He positied that competition is not abolished by concentration but renewed on a higher level, (see also Weeks 1978) . Thus Lenin speaks not only of increased monopoly, but also of monopolistic competition . Concentration and oligopolisation of industries imply not increased stability but rather the increased instability of capitalism . Bucharin (1973) another writer in the twenties, extended Lenin's theory but at the same time limited it to national capitals on the world market . For him, competition and rivalry existed only among capitals of different nations . Thus, in the early part of the twentieth century, we can

99 Theories of competition and monopoly after Marx



CAPITAL AND CLASS see different streams in the discussion of the monopolistic stage of capitalism . One stream emphasises the abolition of competition . Power, especially regarding prices and profits, becomes the dominant force in the economy, bringing about a persistent hierarchy of profit rates . The other stream keeps Marx's theory alive, holding that - regardless of the genesis of monopolies - capitalism is regulated by the self-expansion and competition of capital . Monopoly profit is related to special cases (Varga 1968) and, in the long run, is threatened by competition from other capitals . Later economists, such as Dobb, Kalecki, Lange, Sweezy, Steindl and Sherman pick up only one tradition in Marxian literature by concluding that concentration leads to the emergence of a persistent hierarchy of profit rates . They no longer refer to Marx's theory of competition and profit rate differentials and, in essence, have adopted a neoclassical rather than Marxist view of competition, within which `imperfect competition' explains the replacement of the tendency for profit rates to equalise by a hierarchy of profit rates . Not only do these theoretical positions neglect a very important stream of thinking in the earlier literature, the empirical evidence in support of them is ambiguous as well . A number of empirical studies of monopolistic and oligopolistic pricing and profit, differential profit rates, their causes and persistence, have been made and the next section gives a short survey of their methods and results . In the following section we will come back to Marx's theory of competition, by looking at whether it is contradicted by these empirical studies .

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Empirical evidence

There have been a large number of econometric studies of the effect of monopolisation on the rate of profit, though these have nearly all been conducted within a neo-classical framework . Nevertheless, an attempt will be made to see what light they can cast on the debate within marxian economics . The studies assume that the degree of monopolisation within an industry is determined by the following factors : the degree of concentration in the seller market, which is l. a measure of the number of independent firms in the market and their capacity to influence the market prices of commodities : the height of entry barriers to industries, which is a 2. measure of the mobility of capital between industries ; and the degree of collusion between firms within one industry 3. or across industries, which is a measure of the extent to which competition has been eliminated .



COMPETITION AND MONOPOLY Profits are measured in three different ways . There is the P-C,

price-cost margin,

where P is the price of comP modities and C the competititive cost (including a competitive PC' which profit rate) . Then there is the profit margin C

relates profits to the cost of production . Finally, there is the Tr-T

profit rate,

A

ar-T

or

E

' where it is the mass of profit, T is

tax, A is assets, and E is equity . All three measures are problematic . The profit margin and the price-cost margin do not measure the profit rate . The profit rate may be above or below the profit margin . Even with the same profit margins, profit rates might be different because of industries' different capital-output ratios . The profit rate is itself an ambiguous measure of the monopolisation of industries . On the one hand the cost of maintaining a monopolistic position (such as excess capacity) may increase the cost of production . Then the empirically measured profits will differ from real profits . On the other hand, in the course of time monopoly profits are generally captialised by firms . This has an effect on assets . Consequently, if monopoly profits persist over time, the profit rates of monopoly firms converge towards an average . Concentration ratios measure the market share of a certain number of the largest firms within an industry . Those published by the US Department of Commerce as an approximation for the degree of oligopolisation in industries are too rough to measure monopoly . The ratios are therefore generally adjusted for industry groups, for regional markets, for the distribution of firm size within industries, and for the proportion of imports and exports within industries (see Shepherd 1970) . Yet after all these adjustments, concentration ratios remain a very rough measure of monopoly because other kinds of concentration (vertical or conglomerate) which increase market power within an industry are not considered . Entry barriers is a concept that was first introduced in the 1950s by Bain . Four types are referred to in the literature: product differentiation ; economies of scale ; the absolute cost advantages for established firms in comparison with new competitors ; and the large minimum capital required to produce competitively . Product differentiation is measured by the advertising expenditures of firms . Economies of scale are measured by the minimum efficient scale of production (the smallest amount at which all economies of scale are realised) . Absolute cost advantages can be calculated if the cost of credits, raw materials, and patents are compared for firms or industries .

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Capital requirements are usually measured by the amount of investment in industries or by the capital-output ratios . Collusion, the cooperative behaviour of capitalists within industries or across industries, is the most difficult variable to measure . Since it involves all kinds of formal and informal agreements among firms, data is largely unavailable . Some authors have used the number of firms found guilty of cooperative conduct in the US under the Sherman Act, but these cases can not reveal the real extent of collusion among firms . The empirical studies have employed four types of regressions. 1 In earlier studies a very simple type of regression was used to measure the dependence of profit rates on market power . Market power is measured by concentration ratios . The hypothesis is that concentration leads to collusion, and collusion to higher profit margins or profit rates . Cross-sectional and time series studies for the 1930s, 40s and 50s usually reveal a significant positive relation between concentration and profit rates (see Bain, 1951 ; Schwartzman, 1957 ; Mann, 1966 ; Stigler, 1963 ; Collins & Preston, 1970), although the correlation coefficients are sometimes very low (see Bain) . According to Bain's results, concentration leads to higher profit when the concentration ratio for eight firms is greater than 70%, and according to Stigler's results when the concentration ratio for four firms is greater than 60% . The methodology and data base employed in these studies were in the main very weak . Moreover these studies could riot explain the possible persistence of higher profits due to concentration in the seller market (see Brozen, 1971 ; Demsetz, 1973a and 1973b) . It has been argued that competition and rivalry, even among big companies, make the profit rates of oligopolies converge towards a normal one . Indeed, once the data employed by Mann and Stigler are reexamined after including more industries and extending the time period, profit rates are no longer found to be affected by concentration (see Brozen, 1971a, 1971b, and 1973) . Furthermore, the persistence of high profit rates has been found to be due, not to market power but to the higher productivity of firms in concentrated industries (see Demsetz, 1973a & 1973b) . Demsetz has shown in numerous studies that a significant relation between profit rates and concentration ratios exists only for large firms - those with assets above $50,000,000 . He therefore concluded that differential profit rates reflect not market power but the efficiency of large corporations in concentrated industries . Multiple regressions have been used to measure the 2.

COMPETITION AND MONOPOLY dependence of profit rates on barriers to entry . One approach has been to run one regression for industry groups with a high level of concentration, and another regression for groups with low concentration . This is in order to separate the effect on profit rates of entry barriers from that of concentration . A number of studies conducted in the 1960s and 70s revealed a significant positive correlation between high profits (profit margins or profit rates) and entry barriers (Bain, 1956 Mann, 1966 ; Comanor & Wilson, 1967 ; Stonebraker, 1976 ; Ornstein, 1973 ; Qualls, 1972 & 1974) . They also demonstrated that it is only when there are high entry barriers that high concentration ratios have an effect over time on prices and profits . (Potential competitors could otherwise enter the market and bring down the profit rate to the average .) If market barriers are low, concentration ratios do not show any significant positive relation to profit rates ; if there are high entry barriers, high concentration ratios have a significant effect on profit rates (Qualls, 1972 ; Mann, 1966 ; Stonebroker, 1976) . It has also been shown that there is a large dispersion of profit rates in industry groups with high entry barriers (see McNally, 1976) . This is associated with an extension of the concept of entry barriers to a more general notion . Firstly, it has been suggested that, when oligopoly groups are threatened by new entrants, they develop counter-strategies, such as increasing production . Barriers to entry are thus no longer seen as structural determinants of oligopolistic markets (like economies of scale, heavy capital requirements and concentration), but as an outcome of the activities of oligopolistic firms themselves . This has been argued since the 1950s by people like Harrod, Modigliani, Sylos-Labini and Lombardini, and it has recently been repeated by Caves and Porter (1977) . However, the strategies and activities of large firms are difficult to measure, and there are no empirical studies of this . The second way in which the concept of entry barriers has been extended is that not just entry barriers but also exit barriers might cause differential profit rates . Firms might stay industries with profit rates below the average if there are exit barriers might cause differential profit rates . Firms might stay in development, high minimum efficient scale of production and heavy capital requirements . In an empirical paper Caves and Porter (1976) showed a significant negative correlation between exit barriers and profit rates . Since the exit barriers are measured in almost the same way as entry barriers were before, the concept of entry barriers has become very ambiguous . In West Germany, I have found that during the period of stagnation in the 1970s, profit rates in industries were not correlated with concentration . Rather they were highly neg-

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atively correlated with the wage share and capital-output ratios, the latter being an indicator for the organic composition of capital (see Semmler, 1979) . This can be explained by capital not being able to leave the industries even if profit rates are low : in a period of stagnation and declining demand, entry barriers turn out to be exit barriers and for some time profit rates may be below rather than above the average . (This point was made by Hilferding in Finance Capital .) These results do not contradict those of earlier studies, since those related to the more prosperous period of the 1950s and 60s . Heavy capital requirements and high capital-output ratios may be barriers to entry, but in a period of stagnation and declining demand they are also barriers to exit . Thus these barriers are, in fact, barriers to the mobility of capital . (The steel industry in the 1970s is a good example of how heavy capital requirements act as a barrier to the mobility of capital .) Another type of regression has tried to measure the 3. effect of collusion on profit rates . In order to distinguish the effect of collusion from that of other factors, these studies employ concentration ratios and industry growth rates, as well as an indicator for collusion, as independent variables . The results are surprising . Ash and Seneca (1976) found that collusion may be a result of low profits rather than a cause of high profits . However, since the cooperative activities of firms are secret, these results may not be very convincing (see Fras & Grees, 1977) . 4. Since the rate of profit might be significantly influenced not only by market power but also by other industry variables we find a fourth type of regression . In addition to concentration, these test the influence of supply and demand conditions on the rate of profit . Proxies for entry barriers might also be included . For the most part, the hypothesis being tested is that the rate of profit is more influenced by conditions for the production and realisation of profit than by concentration and entry barriers . These studies demonstrate that profit rates are significantly related to productivity, capital-output ratios and unit wage costs in industries (see Bodoff, 1973 and Schwartzman, 1956) and to growth and demand conditions of industries (see Ornstein, 1973 ; Hall & Weiss, 1974 ; and Winn & Leabo, 1974) . When the effect of concentration and entry barriers is also taken into account in multiple regression equations, industry supply and demand conditions are shown to have a dominant effect on profit rates (see Ornstein, 1973 and Winn & Leabo, 1974) . Studies for other countries have demonstrated the same results (for France, see Deleplace ; for Germany see Sass, 1975 and Semmler, 1979) . However, these results are convincing only if

COMPETITION AND MONOPOLY we assume barriers to the mobility of capital . Finally a few studies discuss the relation between profit rates and the size and growth rates of firms . None of these reveals an unequivocal dependence of profit rates on firm size (see Marcus, 1969 and Ornstein, 1973) . It is usually taken that medium-sized firms have the highest profit rates and growth rates (see Stekler, 1963) . However, other studies reveal that it is not profit and growth rates, but the variance and stability of profit and growth rates that differ for groups of firms of different size . Smaller firms may have the same profit rates as big firms, but their profit rates are more unstable and vary strongly in the course of the business cycle (see Singh & Whittington, 1968 and Eatwell, 1971) . 1 Let us now turn to the question of whether the results of the empirical studies on causes of differential profit rates contradict the Marxian theory of competition outlined earlier in this article . As shown above, one type of empirical study was concerned with differentials in industry supply and demand conditions and their consequences for differential profit rates . Studies available from the U .S ., France, Canada and Germany reveal a remarkable influence of productivity, capital-output ratio, wage share, share of exports to sales and growth rates, on differential profit rates . Those differentials of profit rates can be explained easily by the Marxian theory of competition . According to this theory, supply and demand are never equal . Differences in profit rates caused by differences in productivity, capital-output ratio, wage share and growth rates of industries may be explained by differences in time to adjust supply to demand - that is to say, the time to build up new capacity, to produce and circulate commodities where the profit rate is high, and to reduce capacity and withdraw capital from industries with low profit rates . The circuit of capital takes time, and this period of time varies among industries . Thus, disequilibria between supply and demand caused by those natural restrictions on capital mobility cause deviations of market prices from prices of production . This seems to be the reason that empirical tests reveal a strong relation between supply and demand conditions of industries and differentials of profit rates . Another type of study refers not to those natural causes 2. of restricted capital mobility but to the monopolization of industries, concentration, entry barriers and collusion - the main reasons for differential profit rates . Most of the recent studies have revealed that there is no persistence of profit rate differentials solely due to concentration . High entry barriers (product differentiation, large-scale production, absolute cost

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Modern studies and Marxian Theory

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advantages, heavy capital requirements, high capital-output ratios, and entry-preventing strategies of oligopoly groups) which deter new competitors and allow entry-preventing pricing are necessary preconditions for a decreasing internal competition in industries . High profits are revealed only when high concentration is correlated with high entry barriers . On the other hand, unconcentrated industries with homogenous commodities, small-scale production, low capital requirements, low capital-output ratios, numerous firms and an ease of entry result in a profit rate below the average, according to the empirical literature . But these results should be questioned in light of several considerations : First of all, these empirical results do not mean that there is a stable and persistent hierarchy of profit rates in the long run, or even in the course of the business cycle . Studies for the seventies have revealed that entry barriers turn out to be exit barriers in periods of stagnation and declining demand . Largescale production, high capital requirements and high capitaloutput ratios are synonymous with a high proportion of fixed capital in industries . Large capital losses will be the result if the capacity has to be adjusted to declining demand . The rate of profit will fall when capital is unable to adjust sufficiently quickly by vacating a particular industry . Not concentration and entry barriers specifically, but barriers to capital mobility in general seem to be the reason for differential profit rates . Mobility barriers are different across industry . For industries where the period of adjustment is longer the profit rate will stay above or below the average much longer than in industries with low capital requirements and ease of entry . The mobility of capital 1 the period of adjustment towards an average profit rate are different . This is confirmed by the empirical tests of concentration and entry barriers . The empirical data can be interpreted in such a way that the profit rates in industries with heavy capital requirements fluctuate much more slowly than in so-called `competitive industries' . Industries with fewer suppliers and high entry barriers may require a longer adjustment time to reach an average profit than other industries . But, nonetheless, their profit rate is regulated by the average rate of profit . (This conclusion can also be drawn from empirical observation of price movements in so-called oligopolized sectors where the price movements are much slower than in competitive sectors) . On the other hand, the degree of concentration, large scale capital requirements, and capital output ratios, do not remain constant in the face of capital accumulation and growth . Industries with a small scale of production, low capital requirements, and low capital-output

COMPETITION AND MONOPOLY ratios can develop into large-scale, capital intensive industries . This happened in most consumer goods industries and even in the service sector in the post-war period . Those industries now have high entry barriers and profit rates above the average . However, a small number of firms, high entry barriers, and the possibility of collusion, does not mean that the competition among capitals is abolished . As Marx and a certain stream in the post-Marxian literature assume, regardless of concentrated and centralized capital, capitalism is regulated by the self-expansion and accumulation of independent units of capital . Competition among capitals in production, realization and distribution of surplus value cannot be abolished by concentration and entry barriers . In production, the aim of capital is to produce surplus profit by inventing new methods of production, increasing the productivity of labour, and decreasing the cost of production . In circulation, the purpose is to improve the conditions of realization of surplus value by extending the market share . Intersectoral competition, carried out at the level of investments, is related to the distribution of surplus value . The principle of competition is to cheapen the commodities by changing methods of production and capital accumulation . While fewer independent units of capital in production and heavy capital requirements interdependence among capitals . Product differentiation also has a very ambiguous effect on competition . If the product is differentiated, a monopolistic position can arise, but at the same time new products can be invented as substitutues for old products by new capitalists . These two considerations lead us to conclude that concentration and entry barriers might decrease competition temporarily in the market and market prices can rise above prices of production temporarily . Since entry barriers are also exit barriers, monopoly profit is related to special conditions and cases, and may, for example in the case of strong exit barriers, turn into heavy losses, (see the U .S . car and steel industries at the end of the '70s) . Moreover, in the long run it is threatened by the self-expansion of, and competition with, other capitals . 3 . Differential profit rates among firms are to be found in many studies . But there are no studies that can support the hypothesis that the profit rate varies only with firm size . Rather, they demonstrate differences in the variance and stability of profit rates among small and big firms . This finding is also consistent with empirical results about price changes in `oligopolistic' and `competitive' sectors during the business cycle . 'Oligopolistic prices' show more rigid and stable prices than the sectors with small firms, where prices fluctuate very

107



CAPITAL AND CLASS 108

much in the course of the business cycle . The smaller dispersion of the profit rates of big corporations in comparison to small firms, is only an expression of the fact that the profit rates of the big firms are much closer to the average rate of profit whereas the profit rates of the small firms fluctuate much more around the average rate of profit (see Clifton, 1977) . Moreover, differentials in profit rates among firms in a particular industry and between firms within concentrated and unconcentrated industries do not contradict the Marxian theory of competition and prices of production as the center of gravity . Within industries, there are always capitals with lower or higher costs of production because of different techniques used by different firms within one industry . At the same market price, or price of production, the firms have different cost prices, and thus different profit rates . Thus, different rates of profit among firms is not not necessarily a sign of monopoly power . 4. Many studies reveal differences in price-cost margins (P-C P - C • ), in profit margins ( C )' or in mark-ups P (MC + W) (1 + A) among industries or firms (MC = material cost, W = wages, (1 + A) = mark-up) . In linear regressions, concentration and entry barriers are correlated with price-cost margins profit margins or mark-ups (see Qualls, 1972 and 1974) . But, nonetheless, significant positive results are not equivalent to differentials of profit rates due to concentration P - C - rK = PP C C = rK' and entry barriers . Since p CX and Px ' (MC + W) (1 + A) = MC + W +!KwhereKisthecapitalx X output ratio, differences in price-cost margins, profit margins and mark-ups might reflect only differences in the capitaloutput ratios or in the organic composition of capital among industries or firms . Since, in concentrated industries or industries with high entry barriers, the capital-output ratios are mostly higher (see Ornstein/Weston, 1973), the firms or industries might have the same profit rates, but different pricecost margins, profit margins or mark-ups . Moreover, calculated mark-ups by firms - since Kalecki a sign of monopolistic stage of capitalism and imperfect competition do not contradict the classical theory of prices of production and the center of gravity concept . The mark-up over prime cost - in Kalecki's theory a measure of the degree of monopoly power - might only be another expression for the uniform profit rate . The mark-up over prime cost is A = r K MC+ w x Thus, the mark-up must be different in

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109

industries where the capital-output ratio (K) is different, x whereas the profit rate r may be the same in all industries . The mark-up is equal to profit rate only if we assume one-year turnover, and thus equate stock and flow (see also Brody 1974 :89) . Thus, we can conclude that empirical observations about different mark-ups in so-called oligopolized and nonoligopolized industries and different changes in mark-ups in the long run or in the course of the business cycle do not confirm increasing market power or profit rates in so-called oligopolized sectors, and do not contradict the classical and the Marxian theory . Summing up, we can say that the numerous econometric studies conducted mostly by orthodox economists do not provide clear cut support for the monopoly capital hypothesis, wherein, oligopolized industries and/or large scale firms should show profit rates persistently above average profit rates . Indeed, as the studies show, differential profit rates can exist for a considerable time, but whereas differential profit rates among firms clearly can be expected from the Marxian theory of competition, differential profit rates between different industries do not contradict the Marxian theory .

Institutional changes in the structure of capital do not necessarily mean that firms have extended their power over all markets where they operate and can now control their external environment . However it can be said that large corporations as large units of capital - have extended their power over production processes . Yet, assuming these kinds of institutional changes does not mean that we get into conflict with the Marxian theory of competition . In the following I want to put forward four tentative hypotheses that may help to initiate a further discussion of large corporations . 1. It is obvious that large corporations cannot be considered as `powerless' single-product firms located in certain industries and regions, and limited in their economic mobility . The large corporations, as multi-product and multi-plant corporations, are large scale units of capital and have many production processes in many industries and regions at their disposal . What Marx analysed in Vol . I of Capital as the power of capital over the production process and the disposal of workers over the production process and the disposal of workers and means of production has been realized with the growth of large scale firms . However the power over production processes has, according to Marx, another expression : it is the disposal over

Monopoly Power and Corporate Power

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large financial resources (money capital) . Multi-plant and multi-product corporations have such resources at their disposal and can increase their money capital almost independently from monetary policy of central banks . Moreover, this allows them to allocate capital to different industries and countries and to shift resources from one industry to another and from one region and country to another . Moreover, with their financial power, they can resist the unionization of industries or firms and resist wage and other demands of unions . It follows that those large units of capital, which organize production across industries, regions and countries, are more powerful than single monopolies, which are located only in one industry and are a result of a certain market structure . We can therefore say that neither the `locus nor the nature of the economic power from which these contemporary problems stems has anything to do with the market, let alone a monopoly position in the market .' (Clifton 1979, p .3) There are many ways in which these large units of capital can escape the constraints of the monetary and fiscal policy . In addition to the use of their independent financial power to escape from monetary constraints these include : the use of the method of transfer pricing to minimize tax burdens ; shifts in productive capital or money capital from high to low wage countries ; and variations in the rate of production in different countries or regions when threatened by a labor unrest (see Clifton 1979, p .3) . These large corporations as units of large capital obviously possess economic power beyond market power . This power rarely has anything to do with market structure and the degreee of concentration of industries where they operate ; it has more to do with aggregate concentration, absolute size, and power over production processes . Analysis of the changes in the structure and power of the 2. large units of capital does not lead to rejection of the Marxian theory of competition, value and prices of production . According to Marx, the units of capital - represented, for example, today by multi-plant and multi-product corporations - are concerned with the reproduction and self-expansion of capital . Self-expansion of capital - the growth of the firm - is (as widely accepted) the aim of large corporations . For the Marxian theory of competition, the competitive fights of capitals are a result of the self-expansion of capital . Fewer units of capital does not imply decreased competition and decreased rivalry . Concentration and centralization of capital also does not mean less mobility of capital, as maintained in the post-Marxian theory of monopoly . On the contrary, we can see that historically, as the units of capital have become larger, the mobility of capital -

COMPETITION AND MONOPOLY especially of money capital - has increased . The large units of capital, i .e ., modern corporations, are independent centres of financial power ; they can shift money capital quite easily (see Clifton 1977) from one region to another and from one industry to another when the competitive fight of capitals makes such actions necessary . The traditional notion of `monopoly', however, only refers to a market structure which differs from `perfect competition' in that it has fewer units of production and less mobility of physical resources leading to less competition and more monopoly power . But, in the Marxian sense, less `perfect competition' does not mean less competition . Thus, large units of capital do not imply that the degree of competition and rivalry decrease . Competition is the result of self-expansion of capital . One of the main fields where the battle of competition is fought is `cost competition', or, as Marx put it, competition is a battle for `cheapening the commodity' (see Shaikh 1978) . According to the theory of monopoly, which is oriented 3. to the market structure of industries, more monopoly power means monopoly prices and monopoly profit rates . From monopoly as a general phenomenon (see Baran/Sweezy 1966, Ch . I) it follows that the theory of value has to be rejected because laws of prices can no longer be analyzed . We cannot necessarily draw these conclusions if we look at monopoly from the point of view of large units of capital or large corporations . The existence of corporate power, or power of large units of capital, does not necessarily mean that there will be prices which persistently deviate from prices of production and that there will be a hierarchy of profit rates . As shown in many recently published articles, the pricing procedure of large corporations does not contradict the classical and the Marxian theory of process of production as center of gravity of market prices . The pricing method of large corporations or oligopolies in industries is oriented toward long-run normal cost, long-run normal output and long-run prices . Administered prices, mark-up pricing and target rate of return pricing can be seen as different, but only slightly varying, methods to calculate a long-run centre of gravity for prices which guarantee an average rate of return on investment for large corporations or their operating divisions, and thus guarantee a steady rate of the self-expansion of capital . The recent discussion on pricing methods of oligopolies or large corporations (see, for example, Coutts/Godley/Noodhaus, Eichner, Clifton) show that pricing methods observed for oligopolized industries or for corporations do not contradict the classical and Marxian theory of gravity centre but, on the contrary, are quite consistent with it .

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4. These two different concepts - the concept of monopoly power and the concept of the power of the large units of capital - lead to different political implications . The concept of monopoly power or market power implies that the market structure has to be controlled and regulated by the state (antitrust policy for regulating the market shares of firms) . If we refer to the power of large units of capital - a power beyond market power and a competition beyond firm competition in industries - the aim of the policy should be the control and regulation not of market shares but of the financial resources, investment and production of the large corporations . This concept of regulating economic power, which is widely discussed in Europe, especially among trade unions in Italy, Germany and France, goes beyond the traditional anti-trust policy .

References Altvater, E . (1975) . 'Wertgesetz and Monopolmaoht' in : Das Argument

AS 6, Berlin . Altvater, E ./Hoffman, J ./Semmler, W . (1979) . Vom Wirtschaftswunder zur Wirtschaftskrise - Okonomie and Politik in der Bundesrepublik Deutschland, Berlin . Arrow, K .J ./Hahn, F .H . (1971) . General Competitive Analysis,

(Holden-Jay), San Francisco . Arrow, K .J . (1975) . 'Towards a Theory of Price Adjustment', in : Brozen, Y ., The Competitive Economy (Yearning Press), Morriston . Asch, P ./Seneca, J . J. (1976) . 'Is Collusion Profitable?' in : Review of Economics and Statistics . February . Bain, J . (1951) . 'Relation of Profit Rate to Industry Concentration' in : American Manufacturing 1936-40, Quarterly Journal of Economics, 1965, August . Bain, J . (1956) . Barriers to New Competition, Boston . Bodoff, J . (1973) . 'Monopoly and Price Revisited' . Unpublished Ph .D . Dissertation . New School for Social Research, 1973 . Brody, Y . (1971a) . 'Bain's Concentration and Rates of Return Revisited', in : Journal of Law and Economics, 14 October . Brozen, Y . (1971b) . 'The Persistence of High Rates of Return in High-Stable Concentration Industries' in : Journal of Law and Economics, October . Brozen, Y . (1973) . 'Concentration and Profits - Does Concentration Matter?' in : Weston/Ornstein, a .a .O . Bucharin, N . (1973) . Imperialism and the World Economy . (Monthly Review Press), New York . Bussmann, L . (1965) . 'Der Einfluss des Konzentrationsgrades einer Branche auf die Preise and Gewinne im interregionalen Vergleich' . Diss ., Munster .

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Caves, E .R ./Porter, M .E . (1976) . 'Barrier to Exit' in : Masson, R .T ./ Qualls, P .D . (ed .), Essays on Industrial Organisation in Honor ofJ.S. Bain,Cambridge . Caves, E .R ./Porter, M .E . (1977) . 'From Entry Barriers to Mobility Barriers : Conjectural Decisions and Contrived Deference to New Competition' in : Quarterly Journal of Economics . Clifton, J .A . (1977) . 'Competition and the Evolution of Capitalist Modes of Production' in : Cambridge Journal of Economics . Clifton, J .A . (1979) . Administered Prices and Corporate Power (unpublished paper) Washington . Comanor, W ./Wilson, T . (1967) . 'Market Structure and Performance' in : Review of Economics and Statistics, 49 November . Collins, N . /Preston, L . (1968) . Concentration and Price-Cost Margin in Manufacturing Industries . University of California Press, 1968 . Coutts, K ./Godley, W ./Nordhaus, W . (1978) . Industrial Prices in United Kingdom, Cambridge . Deleplace, G . (1974) . 'Sur la differentiation des taux de profit' in : Cahiers d'Economie Politique, Nr . 1 . Deleplace, G . (1981) Marche et concurrence chez Marx, in Cahiers d'Economie Politique, No 6, Paris . Demsetz, H . (1973a) . 'Industry Structure, Market Rivalry and Public Policy' in : Journal of Law and Economics, 16 April . Demsetz, H . (1973b) . The Market Concentration Doctrine. Washington, American Enterprise Institute . . Eatwell, J . (1971) . 'Growth, Profitability and Size - The Empirical Evidence' in : Marris D ./Wood, A . (eds) The Corporate Economy . Boston . Eatwell, J. (1978) . The Rate of Profit and the Concept of the Equilibrium in Neoclassical-General Equilibrium Theory, Cambridge, Mscr . Eichner, A . (1976), The Megocorp and Oligopoly : Microfoundations of Macrodynamics, Cambridge . Epstein, E .M . (1979) Firm Size and Structure : Market Power and Business Political Influence ; A Review of the Literature, (unpublished paper)/Washington D .C . Fliesshard, P ./Haupt, U ./Huffschmid, J./Schlotony, R ./Sorgel, A . (1977) Gewinnentwicklung and Gewinnverschleirung in der westdeutschen Grossindustrie, 2 Bande, Koln . Fraas, A .G ./Greer, D .R . (1977) . 'Market Structure and Price Collusion - An Empirical Analysis' in : Journal of Industrial Economics, September, Vol . XXVI . Fraas, A .G ./Greer, D .R . (1977) . 'Market Structure and Price Collusion - An Empirical Analysis' in : Journal of Industrial Economics, September, Vol . XXVI . Fuchs, V .R . (1961) . 'Integration, Concentration and Profits in Manufacturing Industries' in : Quarterly Journal of Economics, 75 May . Garegnani, P . (1978) . 'Changes and Comparisons - A Reply' . (Mskr. ) CSC 18 _H

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Garegnani, P . (1976) . 'On a Change in the Notion of Equilibrium in Recent Work on Value and Distribution : A Comment on Samuelson' in : Brower, M . et al . : Essays in Modern Capital Theory, Amsterdam (North Holland) . Garegnani, P . (1977) . 'On the Theory of Distribution and Value in Marx and the Classical Economists' . (Mskr .) Hall, M ./Weiss, L . (1967) . 'Firm Size and Profitability' in Review of Economics and Statistics . 49 August . (Europaische Hilferding, R. (1968) . Das Finanzkapital Verlagsanstalt) Frankfurt/M . Koshimura . S . (1975) . Theory of Capital Reproduction and Accumulation . Ontario (DPG Publishing Co .) Koshimura, S . (1977) . Scheme of Reproduction under a System of Monopoly Price, Tokyo . Krengel, R .U .A . (1977) . Producktionsvolumen undtpotential. im Gebiet der Produktions-faktoren der Industrie Bundesrepublik Deutschland . 19 . Folge, Berlin . Kuruma, S . (1973) . Marx-Lexikon zur Politischen Okonomie, Bd . I, Konkurrenz, Berlin . Lenin, V .I . (1965) . Imperialism, The Highest Stage of Capitalism . (Foreign Language Press), Peking . Levinson, H . (1960) . 'Post-War Movements of Prices and Wages in Manufacturing Industry', Study Paper No . 21 in Joint Economic Committee . Studies in Employment Growth and Price Levels . (U . S . G .P .O .) . MacAvoi, P.W ./McKie, J .W ./Preston, L .R. (1971) . 'High and Stable Concentration Levels . Profitability and Public Policy . A Response .' in : Journal of Law and Economics . October . Mann, M . (1966) . Letters Concentration, Barriers to Entry and Rates of return in 30 Industries, 1950-60, in : Review of Economics and Statistics . 48 August . Marcus, M . (1969) . 'Profitability and Size of Firm : Some Further Evidence' in : Review of Economics and Statistics . Marx, K . (1977) . Capital . Vol . III, New York, International Publishers . Marx, K . (1970) . Wages, Prices and Profit, in : Karl Marx and Frederick Engels, Selected Works in one Volume, New York, International Publishers . McEnally, R .W . (1976) . 'Competition and Dispersion in Rates of Return - A Note' in : Journal of Industrial Economics 25 . McNulty (1975) . 'Economic Theory and the Meaning of Competition' in : Brozen, Y. (ed .) a .a .O . Monopolkommission (1976) . 'Mehr Wettbewerb ist moglich' . BadenBaden . Morishima, M . (1973) . Marx Economics - A Dual Theory of Value and Growth . Cambridge (Cambridge University Press) . Muller, D .C . (1977) . 'The Persistence of Profits Above the Norm' in : Economics, Vol . 44 . Okishio, N . (1956) . 'Monopoly and the Rates of Profit' in : Kobe University Review, May .

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Ornstein, S . (1973) . 'Concentration an Profits' in : Weston and Ornstein (eds .), The Impact of Large Firms on the U .S . Economy (Lexington Books) . Pasinetti, L .L . (1975) . 'The Notion of Vertical Integration in Economic Analysis' in : Metroeconomica, Vol . XXV . Pugil, T . The Effect of International Market Linkage on Price, Profits, and Wages in U .S . Manufacturing Industries (unpublished, dissertation, Harvard University, Department of Economics) . Qualls, O . (1972) . 'Concentration Barriers to Entry and Long Run Economic Profit Margins' in : The Journal of Industrial Economics, April 1972 . Qualls, P . (1974) . 'Stability and Persistence of Economic Profit Margins in Highly Concentrated Industries' in : Economic Journal, vol . 40, no . 4 . Ricardo, D . (1951) . Principles of Political Economy and Taxation . Cambridge . Robinson, J . 'History versus Equilibrium' in : Thames Papers in Political Economy, London 1974 . Schui, H . (1978) . 'Stagnation als Folge differenzierter Profitraten' in : Konjunkturpolitik . Heft 1/1978 . Sass, P . (1975) . Die Unterscuchung der Profitraten-Unterschiede zwischen den westdeutschen Industriebranchen nach dent 2 . Weltkrieg . Tubingen . Semmler, W . (1977) . Zur Theorrie der Reproduktion and Akkumulation, (Olle & Wolter Verlag) Berlin . Semmler, W . (1981) . Competition and Monopoly Power: On the Relevance of the Marxist Theory of Prices of Production for Modern Industrial and Corporate Pricing (forthcoming book), New York . Semmler, W . (1980) . On the Classical and Marxian Theories of Competition, Value and Prices of Production . Paper for the Conference 'The Value of Value Theory', Bielefeld . Shaikh, A . (1976) . The Influence of Inter-Industrial Structure of Production on Relative Prices (unpublished paper), New York . Shaikh, A . (1978) . 'Political Economy of Capitalism, Notes on Dobb's Theory of Crisis' in : Cambridge Journal of Economics, No .2 . Shaikh, A . (1979) . Notes on the Marxian Notion of Competition (unpublished paper) . Shephard, W .G . (1970) . Market Power and Economic Welfare - An Introduction (Random House) . Shepard, W . (1972) . 'The Elements of Market Structure' in : Review of Economics and Statistics . February . Sherman, H . (1968) . Profits in the United States. (Cornell University Press) . Singh, A ./Whittington, G . (1968) . Growth, Profitability and Valuation . Cambridge University Press) . Smith, A . (1977) . The Wealth of Nations . Hammondsworth (Penguin Books) . Steindl, J . (1952) . Maturity and Stagnation of American Capitalism . New York (Monthly Review Press) .

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Steedman, I . (1979) . Monopoly, Competition and Relative Prices (unpublished paper) . Stekler, H .D . (1963) . Profitability and Size of Firm . Berkeley (University of California Press) . Stigler, G . J. (1957) . 'Perfect Competition, Historically Contemplated' in : The Journal of Political Economy, vol . LXV, no . 1 . Stonebraker, R . J . (1976) . 'Corporate Profits and the Risk of Entry' in : Review of Economics and Statistics . February, no . 1 . Schwartzmann, D . (1959) . 'Effect of Monopoly Price' in : Journal of Political Economy, 67 August . Sweezy, P . (1968) . The Theory of Capitalist Development . New York (Monthly Review Press) . Sweezy, P . (1979) . Marxian Value Theory and Crises . in : Monthly Review, vol . 31, No . 3 . Teplitz, W . (1977) . 'Werte and Tausch in Kapitalismus' in : Nehrwert No . 13, Berlin 19. Varga, E . (1968) . Die Krise des Kapitalismus un ihre politischen Folgen, Frankfurt/M . Weiss, L . (1963) . 'Average Concentration Ratios and Industrial Performance' in : Journal of Industrial Economics, 75 May . Weiss, L . (1974) . 'The Concentration-Profits Relationship and Antitrust' in : Goldschmid, N .J ./Mann, N ./Weston, J .E . (eds .), The Industrial Concentration : The New Yearning . Boston (Little Brown) . Weeks, J . (1978) . Marx's Theory of Competition and Implications for the Theory of Imperialism (unpublished paper) . Westen, F ./Ornstein, S .I . (1973) . Trends and Causes of Concentration : A Survey . The Impact of Large Firms on the U .S . Economy . New York (Lexington) . Winn, D .N ./Leabo, O .A . (1974) . 'Rates of Return, Concentration and Growth - Question of Diequilibrium' in : Journal of Law and Economics 17 . Winn, D . N . (1977) . 'On the Relations between Rates of Return, Risk and Market Structure' in : Quarterly Journal of Economics, vol . XLI, 1977 .

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GK IN CAPITALIST BRITAIN? THE LEFT in England has rarely given a

LU

4< Cie FF~~~

high priority to involvement in local government . There are honourable and even heroic exceptions, the most notable being Poplar in the 20s and Clay Cross in the 70s . In recent years, however, there has been a significant revival of interest and activity around local government issues on the Left . This is more than a localised phenomenon . In most of the major conurbations : London, Manchester, the West Midlands, Sheffield, Leeds, the younger generation of the Left of the Labour Party have made city or county councils their target for control, with varying degrees of success . Where the Left has achieved a majority, however precarious, it often has created new policy units within the town and country halls staffed by committed socialists sympathetic to the Labour group's programme. Employment policy has been in high priority for these Labour groups and in three authorities new, committed officers have been recruited to Economic Policy Units/groups/Departments to elaborate and implement interventionist strategies to save and create jobs . Both the councillors and officers involved in this work are embarking on an experiment which, though unlikely to make a significant dent on Thatcher's unemployment figures, could generate important ideas and examples for future socialist economic strategies . It is for this reason that the Capital and Class editorial collective believe it is important to monitor

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118 and to generate debates on these experiments from an early stage . We hope this will be useful both to the comrades involved and to the socialists engaged on other fronts. In this issue, we have produced an `interim report' on the first five months of the GLC's Economic Policy Group . We hope this will be followed by reports on Sheffield and the West Midlands . At this stage we are presenting the policies and intentions of those in the GLC in their own terms rather than from a critical point of view . We feel this is the best way to start the discussion . The report is based on the Economic Policy Group's reports as agreed by the Industry and Employment Committee of the GLC (these are publically available from County Hall, London SE1) and on discussions with councillors and members of the EPG .

THIS SUMMER a grim new `sight' greeted tourists as they walked over Westminster Bridge . A vast white banner strung across the riverside roof of the Greater London Council's County Hall announces the hundreds of thousands of Londoners who are on the dole . This month, August 82, the numbers are 379,539 . The banner is pointed accusingly towards the Houses of Parliament, towards the Government . For the Labour GLC is under no illusion that the high unemployment figures are a `regional problem' caused and solved at a regional level . The recession and the restructuring taking place in its wake, are an international process, exacerbated by government policies ; not to be halted or reversed by regional or local action alone . What then you might ask can socialists achieve as far as job creation is concerned through a regional authority with limited powers? How can they save or create jobs against the rough grain of government policy and international restruct-

uring . Won't any financial initiatives they take outside the government's highly controlled interest rate structure be clobbered by Heseltine? If a socialist policy for transport, an area over which local authorities can - or used to - have some control is seriously undermined, how much less hope is there of a socialist local authority having any influence on unemployment, a problem which is so clearly the result of national and international forces, and over which local government has traditionally exercised minimal powers . You would be right to be cynical if socialists at the GLC based their work on the belief that socialism can be achieved through a strategy of controlling the municipalities, just as similar criticisms could be made of people who generalise from their trade union base or their womens movement involvement to a strategy for socialism through trade union action alone, or exclusively through feminism . Members of the GLC's Economic Policy Group and the councillors with whom they work, see themselves as engaged on one particular front This front, London's County Hall, is a front which has its own peculiar trenches : fifteen miles of corridors, eight different restaurants for different types of people as well as different tastes ; and a rigid hierarchy of grades and functions . It has its own particular weaponry : the financial resources and political authority of an elected part of the state . And the Left are under bombardment from representatives of the enemy with which some of them, at any rate, had not come into direct combat before : notably top local government officials . Though these do not constitute a united, or by any means entirely hostile, force . Moreover, the terrain has shifted dramatically from that to which socialists had been accustomed between 1968 and the late 70s . That is, the strength and confidence of the Labour movement has

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been significantly, though not totally, undermined . So for that matter has much of the Labour movement's traditional sources of political strength . The Left did not win control at County Hall as a consequence of an upsurge in the strength and confidence of the Labour movement . Labour's (precarious) success was the result mainly of Tory unpopularity, though the cheap fares policy undoubtedly had an influence . The Left's dominant position (again, precarious) within the Labour group was achieved after ten years or so of deft organising in local Labour parties and Borough Labour groups culminating in a concerted effort to be selected as candidates for winnable GLC constituencies . The Left that carried out this takeover was itself the product of the struggles of the late '60s and early '70s but its organised base in the 1980s is limited to constituency party activists like themselves, the diffuse network of feminists, black and other radical organisations plus a small layer of committed trade unionists . This gap between the strength (however limited) of the left's political position and its industrial and social weakness is a major problem running though the work of the GLC's Industry and Employment Committee (IEC) and the Economic Policy Group (EPG) . This report on the first five months of the EPG's work with the IEC will try to suggest the specific ways in which the Left's limited local political power over economic policy can be used to strengthen and revitalise socialist politics more broadly, without any assumption that it is the only, or the most important way . We will describe these ways under several headings :Firstly, the ways in which a Left local authority can contribute to the defence of labour, that is the defence of jobs, of skills and of trade union organisation, in the face of a fierce restructuring by

capital . 119 Secondly, the contribution the GLC hopes to make in the area of economics to labour's ability to pose a credible socialist alternative and way out of capitalism's crisis . Thirdly, the way that the experience of power, however limited and momentary, within the existing political system can be used to give greater practical substance to a strategy for socialist democracy, in a parliamentary democracy . Under all these headings there is some experience which we can analyse, but in general we will report on strategies and hopes rather than achievements and failures . We hope to give some idea of how councillors and the EPG would assess the success or failure of their work, of what the conditions are for success and failure and of the problems that are constantly raised but to which the comrades concerned would not claim to have a definitive answer .

The defence of labour To contribute to the defence of labour is perhaps the most daunting and yet the most fundamental of the tasks just listed . For it is not simply a matter of backing up the trade unions in their day to day defence against the unemployment produced by management's minor cost cutting exercises . It is defence against a massive wave of restructuring that has left previously strong trade union organisation in a state of despair . The only comparison which will convey the force of the tide that is washing away the jobs and trade union organisation of London's manufacturing industry is with the de-industrialisation of London in the late nineteenth century, the decimation of London's new manufacturing industries which produced `outcast London' . In one sense the impact of the present depression is even worse, because the

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decline is from a greater height . From 1,523,000 jobs in London's manufacturing industry in 1951 there are now around 650,000 . This is nearly a full circle back to the number of 1861 when there were 469,000 . Between 1971 and 1981 employment in manufacturing declined by 37% - 400,000 jobs had gone . This is part of a national process effecting all major conurbations . As far as London is concerned the strength of the wave began to build up in the 50s and 60s . From this period onwards, the major corporations established their new and competitive factories outside cities, away from high land prices - having stripped its assets - away from overburdened transport facilities, and away from organised labour . Increasingly it has been the uncompetitive declining plants or sectors which have remained . And as the recession has really begun to bite, sharpened by high interest rates and cuts in public spending, it is these plants and sectors which have collapsed . (Friend and Metcalfe 1981) . The real force of these trends hit the Economic Policy Group, from the moment they started work in March 1982 . Requests for help from workers facing major redundancies or complete closure came in thick and fast . First, there were workers from Staffa Engineering, where some months previously the multi-national holding company, Brown and Sharpe had moved the work from Leyton, East London to Plymouth as part of its international restructuring, aided by a government development grant . 400 skilled jobs were to go . A few of the remaining workers with some support from local management wanted to create a new company . Then there were workers from Associated Automation, a GEC owned company in West London . GEC was rationalising its telecommunications division, moving all work on relays to another site and running down

production of mechanical pay telephones . The Willesden factory was to close, 300 skilled and semi-skilled jobs were to go . The workers and local management wanted to buy the factory and start a co-operative . Women workers from Lee Cooper Jeans were the next group . Lee Cooper was moving production to Cornwall as part of a rationalisation of production, 200 women would lose their jobs . Next, a West London T&GWU officer contacted the GLC to say that his members at Thorn EMI were in danger of losing their jobs with the closure of an M .O .D . factory where EMI produced components for missile systems . All these came in one week . It proved to be a typical week . What could be done in these circumstances to help save jobs and to maintain or extend trade union organisation? First, it is important to remember that there was no recent experience in the history of the GLC or indeed most local authorities, of intervening on the side of labour to save jobs . True, local authorities have increasingly been trying to do `something about unemployment' ; Employment Committees, Economic Development Units, local authority advice centres for small businesses, cooperative development agencies with local authority funding, have been popping up everywhere, in Labour and Tory controlled authorities alike . But except in a few cases, intervention in plant closures and redundancies are treated as outside the remit of local policy . Local authorities see themselves as responsible simply for trying in a small way to clear up the mess left by economic decisions which they assume to be unavoidable or outside their influence . They might promote their areas as a place in which to set up a factory, in the hope of attracting the `foot loose' companies that are supposedly wandering around the country .

SOCIALIST GLC? Or they might give special concessions, cheap factories, advice and small grants to small businesses . They will seek to grease market mechanisms in the hope that these mechanisms might operate in favour of their locality, but they will not intervene . This, roughly, had been the policy of the GLC under the Tories . They had established the London Industrial Centre in order to advise small business and promote London as a place to invest : for instance under the Tories £80,000 per year was spent on promotion of London in the United States . (The Labour GLC put a stop to this kind of promotion and has now wound down the London Industrial Centre completely) . The first problem then, in responding to workers facing redundancies was lack of the mechanisms and the people with the experience of intervening on the side of labour to save jobs . All five of the members of the Economic Policy Group immediately became involved with the workers who contacted them during the first few weeks . But five people - two of whom are job sharing- is not a task force of a sufficient scale to make the intervention that is necessary in more than two or three cases. Merchant banks working for capitalist interests, would apply a task force of that size or more for each case . The next step in the face of closures and redundancies has been for the EPG to see what chance there is of reversing management decisions, through trade union action . If there has been any possibility of this, for example as seemed an initial possibility at Staffa and at Thorn EMI, the next step along with moral and publicity support for a trade union campaign, is to work with the stewards on a negotiating plan that would both be the focus of the campaign and the proposal to put to management . The intention is that the GLC should back up and strengthen the bargaining position of the .

trade unions . This does not always mean very much however, especially where the company concerned is a vast multinational corporation for whom GLC money is chicken feed . For GLC money to make a difference and for GLC- trade unions conditions on the financial support to be monitored in such circumstances, there would need to be very strong shop stewards co-ordination throughout the corporation as well as strong support from regional trade union organisations . In Brown and Sharpe there was no such combine wide coordination to save Staffa and official support for the workers' industrial action by the main union concerned, the AUEW was not sustained . As a result the occupation by the Staffa workers failed and the factory jobs will be lost . At Thorn EMI, officials of the main union involved, the T & GWU, took the initiative in resisting the closure but the factory organisation did not show the militant spirit shown by the Staffa workers and the combine wide organisation at Thorn EMI is weak . The GLC can do something to help to strengthen the trade union campaign ; for instance it can fund meetings and information bulletins, etc . across multiplant combines during a campaign against a closure, as the Newcastle City Council did during a campaign against the closure of a Vickers factory on Tyneside . Councillors and officers can also help to strengthen the confidence of the workers involved . The fact of political support and the possibility of some financial support undoubtedly helps to lift the sense of hopelessness which overcomes workers facing the threat of redundancy . Thus, Councillors and EPG members stress that it is important to ensure that workers' relationship with GLC is the one which encourages self confidence among the workers, rather than gratitude and dependance . This is

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affected by small practical things like the GLC representatives meeting the workers on their home ground rather than always at County Hall and talking directly with stewards as well as to full time trade union officials . At the very least GLC officers and councillors must make the limits of the GLC's power very clear to the stewards so that there is no danger of a repeat on a local level of the kind of debilitating reliance workers have placed on Labour governments . In these ways, local authorities can help increase the possibility of trade union action, but cannot substitute for a trade union fight-back where it is lacking . So far the GLC has been involved in two types of defensive job saving exercises . The first type involves saving some jobs out of a bankruptcy that would otherwise have led to total collapse ; and enabling the trade unions to gain some control over the future management of the company . The instance of this type was the rescue of 120 out of 400 jobs at Austinsuite, a vast furniture factory in the East End of London . The company was with the Receiver, and given the cost of the huge factory, likely to be taken apart rather than sold as a working operation . The GLC, concerned to save jobs in an industry already decimated by the recession, offered to buy the factory at £1 .25m and provide an 18 months revenue grant based on £20 per job per week on condition that plans for the future of the business was negotiated with the unions and the GLC . A buyer with a track record in the furniture industry that was acceptable to the unions, was interested and the factory was reopened . The final deal requires the revenue support to be given in quarterly payments subject to trade union and GLC satisfaction that the new management was abiding by its employment commitments . Moreover the whole deal was based on an agreement that the

workers as a collective would receive a share of the profits as soon as the company was made viable, if they so wished . The factory trade union organisation has a place on the Management board along with the national union (FTATU) . The logic behind this latter idea is that the unions' national resources will be available to back up the shop stewards in their negotiations over the unfamiliar issues of investment, finance and production which will come up on the Board . £2 million of ratepayers money is a lot for a local authority to contribute to an industrial deal, as the Evening Standard lost no time in pointing out . 'GLC gambles with Rates' was how it described the deal . It is a risk, as is any intervention by labour against the workings of the law of value ; depending on labour's strength, every gain, every job saved, can prove temporary . To the Evening Stardard, however, the risk is that of having a socialist local authority setting the pace over what in their view, should be purely commercial deals . What is the risk for the calculation of ordinary ratepayer, the working class family in the East End of London, for example, where the furniture industry is based? First, although some of the money used in the deal comes from such families, the greater proportion comes from businesses and from the wealthier suburbs of outer London (Bromley, the Tory borough who challenged the Fares Fair policy, for example) . Second, the deal is conditional on jobs being saved . On the GLC's calculations, for every £20 per job given by the GLC, £160 of wealth is produced, a high proportion of which will go to East End families, and back into the East End economy . A deal like this is admittedly defensive, and only partially successful at that but in the present economic circumstances defence of jobs and trade union

SOCIALIST GLC? organisation is a precondition for any further advance . The Austin deal illustrates the particular importance of Labour's political power in a local authority at a time when labour is industrially weak . In past recessions when Labour has lacked or failed to use its political strength, bankruptcies have enabled the dynamic, competitive sections of capital to restructure without any pressure from labour . By contrast, in an Austin type deal the labour movement was able to use its political control over finance to provide the conditions for continuing trade union strength throughout the period of restructuring . This political control provides a form of protection against pressures which trade unionism alone is unable to resist . In this way then, the economic policies of a left local authority can be a particularly useful defensive instrument for the labour movement, especially at a time of capitalist restructuring . That at least is a hypothesis that could be drawn from the first few months of the GLC's new economic policy, to be tested against the experience of the next two and a half years . (The GLC elections will be in May 1984) . The second type of case where the GLC has intervened to save jobs is that of a closure by a multi-plant, even multinational corporation, where trade union organisation is so weak, or the management so mighty that neither the industrial nor political bargaining power available, can reverse management's decision . Here the problem was how the GLC could help the workers concerned to retain some form of collective strength and prevent the further fragmentation of the labour movement in London, through creating a new enterprise . Two cases out of the initial requests for GLC help fell into this category . These cases were the Associated Automation factory at Willesden and the Lee Cooper Jeans

factory in Romford, at the very outer reaches of Greater London . At Associated Automation the unions had fought redundancies more or less successfully with political campaigns and industrial action for several years . But at the end of 1981 Weinstock made a further determined effort to close the factory . Shop stewards' co-ordination across GEC was not in the end strong enough to prevent the movement of AA's work . Weinstock was determined to be rid of the plant and was prepared to sit out any industrial action . He could afford to, sitting as he does on £1,000 million . In the end the AUEW branch, supported by AUEW-TASS representatives, decided that in the circumstances they were not going to be able to force Weinstock to change his mind and their only chance of retaining their jobs was for them, as workers organised through their trade unions, to buy the factory and machinery . Initially, they will take over some of GEC's old markets for electromechanical telephone systems . These did not produce high enough profits for GEC but the workers reckon that they can provide the viability for the new enterprise for the next two years . In the longer run though, the workers recognise that they will have to identify new markets and work on the design of new products . They have kept the best of the old design team some of whom have rejected highly paid jobs with GEC in order to work on new products for the workers' factory . All of this depends on finance being available without the higher interest rates charged by commercial banks and on help in securing markets, for example, with British Telecom . As in the case of Austin's the GLC is prepared to buy the property and also in this case provide some initial start-up capital . The end result - in August 82 - is that 182 jobs look like being saved for the time being, with the

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organisation remains intact and its links with the district trade union organisation are strong . The shop stewards concerned recognise however that jobs are by no means secure ; they are still partially dependant on GEC, and on the banks ; and they are still vulnerable to the uncontrollable pressures of the market . The internal organisation of production is more democratic but this simply provides a base from which to resist external pressures as strongly as in the past they resisted management . At Lee Cooper a group of workers has salvaged something from the closure on a smaller scale . In the face of management's determination to close, the women working for Lee Cooper felt powerless . The unions had never been allowed to recruit, so there was no tradition or organisation . However, eleven women machinists were determined to keep something going . They formed a co-operative to make children's clothes, especially for families on the huge local estate, Harold Hill - one of the largest housing estates in Europe . They intend to design and sell the clothes in a way which enables parents, as consumers, to have a greater influence over the product than traditional market mechanisms allow . Samples will be discussed throughout the estate and consumers themselves will have some stake in the co-op . The GLC has provided the initial funding, arranged for clothing industry experts to be available and helped to put pressure on the local authority to make well placed premises available at a peppercorn rent . It has also helped to ally the new co-operative with the trade unions . All the women involved joined the Tailor and Garment Workers Union for the first time in their lives, and union officials are giving the co-operative considerable support . Like the workers at Austinsuite,

these two groups of workers were trying to defend their livelihood and collective strength in the face of capitalist reorganisation . However, unlike the workers at Austins neither they nor the GLC had the power to extract concessions from the particular company carrying out the restructuring . Austins was a single plant enterprise gone bankrupt, GEC and Lee Cooper are multi-plant corporations rationalising to improve their already powerful competitive position . At GEC's Associated Automation and Lee Cooper's Harold Hill factory the only alternative was to identify a strategy for organising the available productive resources, including the worker's own skills and energies, as much in the interests of labour as the market pressures would allow . In these cases, then, the GLC through its financial powers, and its political authority with other public sector bodies, provided a means of protecting these workers while in response to capitalist restructuring, they restructured in the interests of labour . This goes beyond the traditional defences of the trade union movement, but nevertheless a condition for its success is a close alliance between the new workers' enterprise, the GLC and the trade unions .

Illustrating the socialist alternative This brings us to the next heading ; the contribution of the GLC's economic policy to demonstrating that there is an alternative to the present policies of government and management . This is not separate from the GLC's defensive work ; the best strategies for defence of labour's interests contain some of the principles of socialist production . And, to win support for such principles, they must be applied to the needs of working people as workers, parents, consumers

SOCIALIST GLC ? and users of social services in the face of the present recession and crisis . Socialist principles must point to a way out of that crisis for working class people . For it is not merely a crisis of `the system', it is a crisis for people's lives and futures too, and people are in no position to accept the reassurance that, 'it will be all right under socialism' . Through the GLC it is possible both to put forward arguments and propaganda for socialist answers to the economic problems which now dominate peoples lives, and to illustrate these arguments with working examples of what these answers could mean in practice . From the socialist vision of a mode of production based on the direct association of workers to meet each other's needs and the needs of children, the old and the sick, GLC Councillors derive the following working principles for the GLC's industrial strategy in capitalist London . 1 The principle of bringing wasted assets - human potential, land, finance, technological expertise and resources into production for socially useful ends . 2 The principle of extending social control of investment through social and cooperative ownership and increased trade union powers . 3 The principle of development of new techniques which increase productivity while keeping human judgement and skills in control . The method of putting these principles into practice is closely related to the principles themselves . Two features of that method so far stand out : first the importance of popular involvement in identifying the social needs, wasted resources and the choice of technologies referred to in these principles . The GLC is encouraging what it describes as `popular planning' with trade unions and in community based organisations . The aim of this is to produce both immediate

plans to save or create jobs, to be implemented by the GLC, and longer term perspectives to guide struggles against government and management . Popular planning is an attempt to generalise the approach the Lucas Aerospace workers' plan for socially useful production . The aim is to encourage shop steward committees, trades councils and community based campaigns to move beyond their traditionally defensive positions to put foward proposals for jobs to meet social needs . The GLC is providing support for this process by funding research, educational and organisational resources to help workplace and community groups develop their proposals for socially useful production or services . For instance, the EPG is working with Adult Education Institutes, the WEA and trade union education departments, on a programme of education for popular planning . Moreover the GLC is providing funds for local trade union and community research and resources centres . In all this the intention is to help to strengthen workplace and community organisations and increase their self confidence in a way which cannot be reversed by a change in political control of the GLC . The second and related point concerns the GLC's approach to technology . Technological innovation is fundamental to at least two of the principles suggested above . But the GLC's Industry and Employment Committee does not endorse the view that new technology is somehow inherently progressive, or that there is even such a thing as the new technology . Rather they recognise that there are several different directions in which technology could develop, according to different social and economic objectives . The Industry and Employment Committee has defined its objectives in a general way but the implications for the choices of technology will be developed through the popular planning process re-

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ferred to above . For this to be possible facilities and expertise on technological matters need to be made far more accessible to working class people who in the past have been excluded from judgement between different technologies . An important initiative already underway to meet this need is the creation of several technology networks, some based on geographical areas such as North London and others based on product areas such as energy . These networks will harness the often underused facilities of London's polytechnics and universities, for the use of trade unionists and others who wish to develop employment plans either as bargaining positions in their own company or as the basis of a co-operative or municipal enterprise . The networks will for instance develop a `product bank' of prototypes of new products of a socially useful kind that would be available for such groups . A recent report agreed by the GLC's Industry and Employment Committee summarised its criteria for socially useful production and technology :- `Socially useful products are such as to conserve energy and materials (bQth in manufacture and in use) ; their manufacture, repair and recycling are carried out by non alienating labour ; and their production and the products themselves should assist human beings rather than maiming them' . On this definition socially useful production is in effect socialist production, but that does not mean that we have to wait for a socialist society before we can campaign for and even achieve technology and investment policies based on the criteria of socially useful production . In fact, at a time when socialism has lost any specific and hopeful meaning to the majority of working class people, illustrations of what socialist production could mean, play a much more important part in socialist strategy than ever before .

Some first examples The process of popular planning and establishing the technology networks is only just beginning to develop, but three illustrations of socially useful production and services are already being explored with workers and users concerned . First, discussions are going on in one locality between tenants groups, shop .stewards from the Direct Labour Organisation, trades council delegates and councillors, to develop an employment plan to meet local heating needs ; a plan for `jobs from warmth' . These discussions which will involve tenants surveying their own heating needs and trade unionists identifying available building, designing and engineering skills are a pilot initiative which, it is hoped, will contribute towards London wide plans for jobs to meet public sector heating needs . Some of these plans could be backed by GLC funding, e .g ., a municipal heat pump factory, others by borough funding, e .g ., expansion of Direct Labour Organisations ; and generally they will strengthen the campaigns of tenants groups and buidling and engineering workers and contribute to the argument for national policies based production for social need . Another issue where municipal enterprise with worker and user control in London could set an example for national policy is cable television : the wiring up of London . A proposal has been passed by the GLC that councillors and officers should discuss with management and workers at British Telecom the possibility of a public sector lead on cables television for London . Already work is in progress on a plan for the wiring up of London . The plan is likely to emphasise that the cables should be of an interactive kind so that people can feed in, as well as receive, information and ideas .

SOCIALIST GLC? The cable network would be discussed and where possible shaped by the popular planning process : that is it would be needs led rather than market led . A third area where discussion is beginning, with added impetus from the creation of a GLC Women's Committee, is that of domestic labour, in particular child care . Domestic production or reproduction is seen by the Industry and Employment Committee as an area of economic activity, a sector in which the GLC ought to invest, to create worthwhile jobs which meet social needs, especially those of the women at present carrying the burden of private unpaid domestic labour . Already a group of women in South London have drawn up some proposals for child care centres in their locality . These would also provide food and laundry facilities . Employers would be pressed to contribute to their funding, according to the number of employees making use of them . The GLC might be asked to provide the starting capital . In West London the GLC has already funded a new co-operative laundrette which has special facilities for old age pensioners and for people with children .

GLEB : An improvement on NEB? The GLC's main means of implementing all these plans is the Greater London Enterprise Board (GLEB) . This is very much a hybrid organisation, an expression of the tensions inherent in trying to carry out a socialist local economic policy in Tory Britain . Its architects, the authors of Labour GLC manifesto, in particular Michael Ward, the Chairman of the present Industry and Employment Committee, have tried to learn from the failings, from labour's point of view, of the National Enterprise Boards (Joint Trades Councils 1981) .

However, within the limits of a local authority, constrained by national legislation they have not always been able to carry these lessons all the way through . Moreover the GLEB's limited resources - around £30 million a year but always vulnerable to legislative changes- means that it can do little more than support exemplary initiatives . It is worth listing some of the failings of the NEB and summarising the way that the GLC intends that the GLEB should overcome them . The first problem was the autonomy of the National Enterprise Board from political control . Of course even if the NEB had been under more direct political control this would have made little difference to its behaviour, given the politics of the cabinet at that time . From the point of view of a socialist government or local authority however, the fact that politics was not in control was a grave failing . Each of the three local authorities carrying out highly interventionist industrial policies has adopted a different solution to the problem . It will be interesting to compare results . Shefield City Council has decided not to have an enterprise board but always to intervene directly . The West Midlands County Council, like the GLC has established an enterprise board partly so that it can respond quickly to industrial cases unencumbered by the procedures of local government and partly because it wants to be able to take equity in private companies and this would be illegal for the Council itself. The West Midlands however have attempted to solve the problem of political control by giving Labour councillors a majority on the Board . The GLC decided against the latter option for GLEB . There are councillors on the board of GLEB . Instead they have developed several practical and formal mechanisms by which to ensure that the GLEB works as the means of implemeting the industrial strategy

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128 agreed by the politicians . For instance at a practical day-to-day level, since no adequate socialist strategy can be developed separate from implementation, the Enterprise Board and the Economic Policy Group will work closely together in `project teams' . At a more formal level there are legal mechanisms which the GLC can use to ensure that the GLEB carries out the plans agreed by the politicians . Ironically there is a section of existing legislation which is especially handy here : Section 137 (1) which requires that GLC expenditure under this heading (the heading used for the £30 million which will be spent annually by GLEB) should be spent in the `interests of all or some of people of London' . This enables the Council, instead of handing money to GLEB to invest according to purely market criteria like a conventional merchant bank, to specify the social priorities on which it wishes the GLEB to take its decisions . Detailed and legally binding guidelines have been drawn up based on the kind of principles outlined earlier in this article . A social basis for investment appraisal has been drawn up providing for higher financial support according to whether the enterprise is based on some form of social ownership and control, on how many employees are blacks or women, how many apprenticeships are created, how high are the wages paid, and how long the jobs are maintained . This form of investment appraisal is a radical innovation to public sector investment decisions and would be worth examining in more detail when there is more experience of its application . This issue of finance raises the second weakness of the NEB from a socialist point of view : the high rates of return which it required, albeit over a longer period than most conventional financial institutions . This suited the kind of

reorganisation to restore companies to profitability which the NEB saw as its purpose, but the GLC intends to innovate and reorganise in a way which will be of social benefit to the labour, without necessarily being commercially profitable in the case of each and every project . The GLEB legally has to charge commercial rates of interest for its loans but where it calculates that the social benefits justify it, it will provide a grant to wipe out or reduce these interest charges . A further failing of the National Enterprise Board was that the Board itself was dominated by representatives of capital : financiers, private industrialists made up the majority, and the 'representatives' of labour were leading trade unionists appointed in a purely individual capacity under no pressures to be accountable for decisions in which they participated . The GLEB seeks to remedy this within the limits of the working relationship it has to have with those sections of capital concerned to rebuild London's industrial base . Private industry is represented on the board but its representatives are in a minority . The trade unions are represented by three trade unions accountable to the Council of South East Regional TUC . This by itself does not of course guarantee that the interests of labour will be met in the decisions of the GLEB, neither will the West Midlands solution of a board dominated by Labour councillors . The ability of the board to act according to a socialist strategy rather than to bail out capital, will depend finally on three factors :First and most fundamentally on whether the shop floor trade union movement supported by full time officials, is able to gather the strength to make sure that all the provisions for social priorities in GLEB investments are exploited to the full . If it is always

SOCIALIST GLC? management who take the initiative in

doing a deal with GLEB, if the trade unions fail to develop positive bargaining positions of their own, both for the deals themselves, and in monitoring how they work out in practice, then however socialist inspired are the GLEB guidelines and investment appraisal techniques, they will make little difference to the GLEB's day to day practice . Secondly, much will depend on the people responsible for the day to day work of the GLEB, how far they are able to build on, encourage and open the door to whatever trade union or community initiatives exist in any particular case . As we have seen in the case of Austin's, Associated Automation and Lee Cooper, the GLC's control over investment funds can be an important addition to the defensive armoury of the labour movement but only if these funds are handled by people who know the direction in which to fire . The determination of the politicians to keep the aspirations of their socialist employment strategy uppermost as they supervise GLEB is the essential back up to these two factors . If all else fails it is the politicians who have to act to prevent GLEB becoming another NEB . Although the left is in a majority in the GLC its hold is precarious . This has inevitably led to cautious tactics . Symbolic of this caution, and reluctance to take on conflict except where absolutely necessary are the excessively high salaries of the Chief Executive of GLEB, and the main Directors (though at £35,000 and £22,000 respectively they are not especially high by private sector standards) . This partly reflects a reluctance to take on the powerful County Hall personnel department and Staff Association . On the other issues of policy, the politicians have proved tough . For instance they were uncompromising on the guidelines and C&C18-I

objectives of GLEB in their negotiations with the first person to be appointed as Chief Executive of GLEB . This led to his withdrawal from the job . In sum then on GLEB : while the GLEB itself could not be described as prefiguring socialist production except perhaps in its methods of investment appraisal and its unit responsible for municipal and co-operative enterprise, it has the potential to support, sustain and protect such prefigurative and defensive projects, if the political and industrial initiative is there to create them .

Towards Socialist democracy? Hovering above all these attempts at industrial intervention, is the clash between the limited democracy that exists and the kind of democracy that is needed . This brings us to the third heading of this report back : the problem of how a socialist majority - however precarious within a parliamentary democracy can contribute to a strategy for socialist democracy . This sounds a bit grand for what can be said at this stage, but it is worth putting it down as a marker a gai1 .s t which to judge the experiences of the remaining years of the Labour GLC . Two aspects of socialist democracy are especially relevant . The first is the principle best expressed by Marx in his discussion of the Paris Commune . One of the features of the Commune he held out as a model of a truly socialist republic was the fact that `The Commune was to be a working, not a parliamentary body, executive and legislature at the same time' (Marx 1968) . This would mean that freedom of opinion and discussion would not degenerate into deception and rhetoric as they do in bourgeois parliaments and councils, for `the parliamentarians would have to work themselves, would have to execute their own laws, they themselves would have to test their

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results in real life ; they would have to be directly responsible to their constituents' (Lenin 1969) . The experiences in County Hall revealed a most sharp division between the `legislature' and the executive ; between elected politicians and appointed officers . A division which, had it been strictly adhered to, would have kept power firmly in the hands of the executive, the non-elected senior officers . Fundamental to this division was the principle that Councillors should not be brought into the preparation of a committee report (note : these reports usually become Council policy) until a final draft is agreed between all officers concerned . Councillors are presented with the final package . In theory they can then question the assumptions, options and arguments behind it, but by then the package is tightly wrapped and only a Councillor who is very familiar with the background will be able to suggest a different direction . And even more rarely would a Councillor go away and write his or her own report . One of the important distinctive qualities of the new generation of Labour GLC Councillors is that they try to be working Councillors, rather than parliamentarians . Many of them have previous experience of local government and many of them work fulll time, eking a meagre living out of `attendance allowances'- less than half the salaries of many senior officers . Even then they found it difficult to overcome the barriers which divide them from administering what in theory are their policies . One barrier is a strict hierarchy determining how Councillors communicate with officers, and at what stage, in the preparation of a report . Councillors on the Industry and Employment Committee have begun to break these barriers down by drafting reports and carrying out research with officers ; and as a result they are in a

better position to test their policies as they are implemented (as well as being able to make sure it is their policies which are being implemented) . Committee meetings themselves however, still degenerate into parliamentarism, partly because of the behaviour of some of the Tories, but fundamentally because whatever progress has been made, the local state cannot be transformed by a precarious majority of socialist councillors, and a few officers politically sympathetic with their policies .

Obstacles to socialist democracy The EPG, the Police Unit, the Womens Support Unit and the Ethnic Minorities Unit have all created little pockets where policy and implementation closely interact . However the power of the top echelon of County Hall's corporate management can in general make sure that these remain only pockets . One reason for this is the power base of these senior officers : the rigidly hierarchical promotion structure . For someone to improve their grade and therefore their salary they have to conform with the rules and conventions set down and interpreted by the permanent corporate management, not by the politicians who come and go . Several councillors would argue that only the break up of this permanent, highly centralised, corporate management, and its hierarchies, and the spread of recallable, politically appointed officers throughout the administration would be a lasting step in the direction of a working assembly . The second obstacle to change is the small voting majority of the Labour group and the left within it, and the fact that the government is ready and eager to pounce on the Labour GLC, at the first sign of weakness and disarray . Unless national political trends are

SOCIALIST GLC? reversed dramatically in the next year or two, it is unlikely that the Labour GLC will be able to complete the reforms which it has begun . But its attempts to do so will produce many lessons for a future socialist government . A socialist government will be up against far more powerfully protected divisions between the legislature and the executive than a socialist GLC . Yet the proposals so far advanced by the left to deal with this problem at a national level : more political appointments at senior levels, a committee of MPs in every Ministry, have in fact virtually been put in to effect at the GLC and proved inadequate . Although socialist Councillors can do something to dismantle the existing machinery of the State their effectiveness will depend considerably on the preparedness of the labour movement in industry and in the localities to take political power away from the existing state .

Popular Power and Parliamentary democracy This brings us to the second aspect of socialist democracy : the growth of popular power - political power based in the workplaces and the localities - and the destruction of the State as a separate institution over and above the rest of social and economic life . Will this popular power develop only from the workplaces and localities or should it be stimulated and encouraged by socialist representatives within the elected councils of the existing State? The presence of socialists in positions of political power who are committed to support and listen directly to the demands of workers and oppressed groups, usually give such groups a confidence to put forward their highest hopes . One only has to look at the brief period when Tony Berm was Minister of

Industry : at all the plans and proposals drawn up by shop stewards, on his encouragement, for proof of this point . The GLC had little such impact initially as far as industry and employment was concerned, because workers had never considered the GLC as likely to be a source of support over industrial issues . However, if the potential role of the Enterprise Board becomes more widely known as a result of some real success in saving or creating jobs, then expectations and demands will be raised . The problem then, a problem not solved by Benn and the left under the last Labour government, is how that initial confidence and release of creativity (e .g . in the form of alternative plans and proposals) can gain a momentum of its own rather than remain reliant on the limited power of the left within parliament or the Council Chamber . This depends on several conditions, few of which are under the control of the GLC ; but a condition which is, is worker's awareness of the limits as well as the possibilities involved in GLC support, and therefore their awareness of the extent to which they will have to exert industrial pressure on their management or on government . One contribution to this awareness will be through the educational programme the GLC will be carrying out in close collabroation with trade union and community activists . The material for this programme on the GLC's economic policy will encourage those involved, to consider how best to use GLC or GLEB support in order to strengthen their power vis-a-vis management and the government, rather than to see the GLEB as the source of salvation . A further problem faced by the GLC's economic strategy is the state of the London labour movement . The recession has already brought about a severe fragmentation and demoralisation . The defeat of Fares Fair policy has

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undermined some hopes that a Labour GLC could provide a significant boost . However the GLC could still make a contribution to overcoming the weaknesses of London labour by supporting and encouraging the London-wide initiatives which are necessary not only to make the most of the Enterprise Board but also to create a positive campaign for jobs against government policy . There are problems and pitfalls in this use of the local state - and we must keep reminding ourselves that the GLC is part of the State, whatever its `relative autonomy' :the first danger is that the popular involvement which the GLC is encouraging ends up little different from the forms of participation which Cynthia Cockburn criticised so justifiably in `The Local State' (Cockburn 1977) . She described how the participation took place on the Council's terms, that is it was used as a means of keeping tabs on and where necessary ameliorating, local feeling, and legitimating council policy, rather than as a means of strengthening the independent and collective power of local working people . There is little danger of this taking place in a conscious manipulative way by the present GLC, given the politics of leading Councillors . But there is always a danger of sapping the energy of trade union and other groups by assuming they must orbit around the GLC, that the GLC is somehow the centre of the London Labour movement - a bit like mediaval scientists assumed the earth was the centre of the universe and the sun must orbit around the earth . It is always a temptation to believe that your base is the centre of things . The popular planning process has so far avoided this trap . It has sought to support, generalise and learn from trade union, tenants, black organisations and womens groups who have developed their own employment plans and campaigns .

For instance Tower Hamlets, Brent and Islington trades councils are now working with shop stewards, and local community struggles to develop plans for socially useful production and services . In the coming year the GLC hope to be working with shop stewards on an industrial sector basis to develop alternative plans for their industry, as part of an overall industrial strategy for London, and as positive bargaining and campaigning demands in the workplace . The emphasis is on starting from workers' existing organisations and initiatives and then encouraging the kind of alliances necessary to go beyond a purely defensive trade unionism . In general councillors try to avoid creating structures which are dependant on the GLC . This does not preclude forums where different groups involved in popular planning can exchange ideas and experiences, but as far as possible these will be organised by the groups themselves . The regular quarterly assembly and co-ordinating committee set up through the GLC's Womens Committee have established a precedent here . Although Councillors attend, and the GLC provides mailings etc ., they are to be organised by the womens groups themselves . Part of their job is to monitor and influence the work of the Women's Committee . In the field of Industry and Employment the main function of this popular involvement will be to generate the trade union initiatives and pressure which is a preconidition of the GLC's success in meeting both the defensive and exemplary tasks set out earlier in this article . In this sphere the measure of how far socialists use Council Chamber democracy to strengthen moves towards socialist democracy will be whether in two or three years time the Enterprise Board is responding mainly to workers proposals for saving and creating jobs or whether it has become a soft touch for private companies in n< :d

SOCIALIST GLC? of bailing out . If the industrial and employment policies of the GLC are successful there will be conflict and backlash . Socialists working within the GLC have to work at two levels at once . They have to do their best to make some real material gains, to save or create as many secure and fulfilling jobs as possible . For this they need a determined optimism, otherwise they will not test all the options . On the otherhand they have to prepare for the defeat of many of their policies in the short term . They have to be able to use that defeat politically to learn the lessons for new advances rather than allow it to demoralise the labour movement in London . This requires a degree of pessimism whose basis is constantly explained in order that the obstacles which their experience reveals can be identified and in the future overcome .

C . Cockburn The Local State 1977 A . Friend and A . Metcalfe Slump City 1981 K Marx and F Engels Selected Works 1968 Lenin Selected Works 1969 . Joint Trades Councils State Intervention in Industry : A Workers Inquiry.

Second edition 1982 .

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Working women A review ofthree recent books on women in the workplace

GIRLS, WIVES, FACTORY LIVES by Anna Pollert, Macmillan (London : 1981) £3 .95 WOMEN ON THE LINE by Ruth Cavendish, Routledge & Kegan Paul (London: 1982) £5 .95 WOMEN, WORK AND THE LABOUR MARKET edited by Jackie West, Routledge & Kegan Paul (London: 1982) £4 .95 SLOWLY, PAINFULLY, in fits and starts, socialist feminism has

begun to get a theoretical grasp on sexual divisions in employment and their relationshop to sexual divisions within the family .' But until very recently contempory writings about work and industry in which workers are allowed to speak for themselves broadcast only male voices .' That has begun to change . Women workers are beginning to find a voice in the sociology of work . Empirical studies are now emerging which attempt to use the theoretical insights so far developed to inform their analysis of women's wage labour . This article reviews three important books in which this has taken place. Both Anna Pollert and Ruth Cavendish have written books on women factory workers based on research carried out in the 1970s. Girls, Wives, Factory Lives is a detailed study of a

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tobacco factory in Bristol, whilst Women on the Line is an account of the author's experience of working on the assembly line in an anonymous loccation . Work, Women and the Labour Market is a collection of articles, edited by Jackie West, which have the same empirical approach . All three books set out to explore what Pollert calls: `the relationship between class and sex in terms of the labour process as it is lived' . In this they succeed to varying degrees.

Girls, Wives, Factory Lives

The question which Pollert's book is primarily concerned to answer is : what is distinctive about the consciousness of women factory workers? In her attempt to find out, Anna Pollert spent three months in a factory employing mainly young single girls, gathering information and conducting informal interviews . She was prevented by management from getting a job in the factory and describes how uncomfortable it was operating as a middleclass researcher of working-class women . Indeed, she justifies her minimal involvement in the women's home, community and social lives largely on the basis of her feelings of awkwardness . From my own experience of participant observation in a factory I can well identify with those feelings . But doing participant observation always raises ethical problems, which are not overcome by restricting its scope to within the factory walls. And this restriction gives rise to its own problems, to which I shall return later. The book is broadly divided into three . The first part situates the factory in the tobacco industry, as well as describing its labour force and labour process. Owned by the Imperial Group, an expanding multinational, the factory was to become victim to Imperial's corporate strategy involving contraction of the tobacco section. Of particular significance was the employers' strategy of increasing profitability within the factory through productivity schemes and regrading. These tended to reflect and reinforce women's inferior pay and job grades relative to those of the few men at the factory. Pollert ends this section discussing the processes whereby `women's work' is systematically undervalued . The second part of the book deals with the ideology and experience of women workers. Having reviewed the literature in this area, the author describes the stereotyped self-image accepted by the women at the factory. These, as she sees it, are derived from the men's images of the women: Steven (chargehand) : some women have to work . But 90 per cent it's pin money . They don't have to work . Steven again : With this women's lib, equal pay, women

WORKING WOMEN are talking themselves out of work . Now, with a man, he's got a family to keep, he's more reliable . I meaan, men don't leave to have babies do they? But the women do! Ida: I think a married man needs a job more than we do . Pam: I expect to be supported by my husband if I'm married, but if I was earning as much as him - he wouldn't feel he was supporting me - he'd be downgraded . Given a sexual hierarchy at the workplace in which all supervisory postions were held by men, Pollert argues that the women understood control over them as male control. The women were arware that the supervisors got paid more than they did and Pollert cites this as evidence of class consciousness, albeit limited. This differential, however could as easily be accounted for by the sexual hierarchy to judge from the women's own stated attitudes to the secondary nature of women's wages. After this section there are a couple of interesting chapters on working-class girls and older women respectively . Following Willis' study of the transition from school to work of working-class boys, Pollert discusses the preparation of working class girls for marriage instead. The girls see themselves as doing a `temporary stay' at the factory before marriage . They fail to confront the reality of their own future as long-term unskilled wage workers. Instead of warning the girls that work might not be temporary, the older women sympathised with their focus on marriage as life's `solution' reinforcing their identification with the roles of housewife and mother . The older married workers and the familiar burden of their housework are the subject of a separate chapter appropriately subtitled `the temporary stay continues' . The third and most substantial part of the book is about struggle at the workplace - the women's resistance and incorporation, the extent of their involvement in trade unions and in a strike which the author witnessed. She describes how `in the context of their general powerlessness over the labour process, the women created their own shop-floor culture' . This discussion of women's daily resistance on the factory again parallels Willis' work on male shop-floor culture. Where it differs is in the extent to which factory politics become sexual politics by virtue of authority being vested in men for the exercise over women. The girls' response to the male supervisors is one that purports to take advantage of their own femininity . However, as Pollert shows, by colluding in their self-presentation as sex objects and therby competing with

CAPITAL AND CLASS each other, the girls were distracted from the possibility of solidarity : Val: You've got to be blue eyes in a factory, you know what I mean? Your face has got to fit or else that's it . . . Well, mine didn't fit, that's for sure . I get into trouble. There's certain people can get away with murder . But with others-when you go into the office to the foreman, well he looks at you as though you were nothing. As though he could spit on you. Instead, the use of feminine guile to challenge male authority only served to further individualise and divide them from each other. Lacking any collective organiational express ion the girls' resistance remained symbolic only . It had no material effects on control within the factory. In a useful chapter on the part played by the TGWU, to which ninety per cent of the workers belonged, Pollert's study goes some way towards accounting for the womens' apparent passivity. She outlines how the shop stewards, all of whom were men, discouraged the women's involvement in union affairs. Themselves party to the view that the union was a `man's world', the stewards promoted this attitude amongst the women. At best the women received a double message - that they had a duty to be good unionists and good housewives : Vera : My husband's branch secreary of his union - the AUEW . Anna' P: Does he get you down to your own union meeting? Vera : Oh no! He wouldn't do that . See- he's got a lot of work - a hell of a lot, I dn't know how he keeps up . See, he needs me - 'come. Unable to fulfil such conflicting expectations - because, for example, union meetings were held outside work-time- the women blamed themselves and felt personally inadequate for being `bad trade unionists' . The younger, unmarried women were simply `vague and thoroughly bored with union business' . Given the absence of strong shop-floor organisation and successful management co-option (shop stewards were regularly promoted to foremen) the women's reluctance to stand for union positions was not surprising . They had also learnt from previous struggles that their shop stewards and union officials could not be relied on for support. All these failings were perfectly encapsulated in the union's handling of a one-day strike, and in its acceptance of the eventual closure of the factory. Remote from decision making and starved of information the women were instructed rather than consulted throughout . Inevitably, Pollert con-

WORKING WOMEN cludes that collective workplace experience does not necessarily enhance classconsciousness. The book ends stressing the potentialities of women worker's contradictory experience and consciousness - `the collisions between women's sexual oppression and their ex ploitation as workers' . It seemed to me that the optimism of the conclusion did not sit comfortably with the author's own data and analysis . If anything comes out of her study it's that workplace experience did nothing for them . These working-class women doing unskilled manual work did not as a result develop a collective identity . Frustrated with academic Marxist and feminist theory, Ruth Cavendish left her job as a polytechnic lecturer to take a working-class job. She was `looking for a new way of being involved politically, where I might have daily contact with working-class women' . She was also hoping that the experience would help her think about the nature of differentiation within the working class and, more specifically, about the links between home and work for low-paid women who work full-time . Due to the threat of libel action, the author was obliged to disguise the firm, its location and the product, as well as the name of the trade union . She even had to use a psuedonym herself. Whereas Pollert remained an observer, Cavendish's book is based on her personal experience of working on an assembly line in a motor car component factory for 7 months . She was employed as a 'semi-skilled' manual worker . The job was labour intensive and alongwith 200 Irish, West Indian, and Asian women she sat all day at a conveyor belt . The work was done exclusively by women. In depressing detail Cavendish describes her daily experience of working at the factory. Although she maintains the impossibility of putting over in writing `the speed of the line, the pace of the work, the fiddliness of the jobs we had to repeat all day long', in fact her account is vivid . The strain imposed by the constant pressure to keep pace with the speed of the line in assembly work has been the subject of various studies - but their focus has been male workers . Here assembly line work is shown to have the same deletrious effect on women as has been demonstrated for men. In addition, the kind of assembly work that women are typically involved in is sedentary and thus shares with women's office work the consequent health hazards that feminists have recently been exposing (Craig, 1981 : Huws, 1982). Amongst those identified by Cavendish are eye strain

Women on the Line

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VOLUMES, Number 1, Spring 1982 : Phyllis Mack, Female Prophecy in the English Civil War. Elizabeth Spelman, Woman as Body : Ancient and Contemporary Views . Natalie Zeman Davis, Women in the Crafts in SixteenthCentury Lyon . Gills Son and Lourdes Benerla, Class and Gender Inequalities and Women's Role in Economic Development . Bernice Johnson Reagan, My Black Mothers and Sisters or On Beginning a Cultural Autobiography. INTERVIEW with Sonia Johnson by Karen Longlois . REVIEW ESSAYS by Martha Vicinus and Katherine See. POEMS by Norms Alarcon and Clarita Raja. ART ESSAY: "Forever Free," An by AfricanAmerican Women . Introduction by Susan Wllland Warlock .

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WORKING WOMEN `concentrating on those tiny objects all day' and the `almost unbearable' aches and pains from sitting in the same position . All in all the job took an enormous toll on her life generally : `the job only left time for basic living . . . it took me hours to relax after work and stop feeling the line whirr through me' . What is unusual in Cavendish's book is that the women on the line were all immigrants . Most were Irish, 20% were West Indian and 10% were Asian . The ways their different cultures affected their perceptions of each other and of their work are detailed at length . The effect of describing the varied cultural backgrounds brought into the workplace by these women is to place a valuable stress on the extent to which different work experiences can coexist on a shared shopfloor . Our understanding of the difficulty of workers organising even within a shared workplace is thereby enlarged . Description reveals that the West Indian women were much more accustomed to industrial life and generally held the Irish responsible for the poor working conditions . It was said that `all these new girls off the banana boat from Cork' would do whatever they were told and never challenge anything . To complicate matters further, both the Irish and the West Indian women had prejudices about the Indian women . Not only was women's work segregated from men's, but the women themselves were segregated from each other into a rigid ethnic hierachy . In this context, Cavendish was a witness to the fact that specific groups of workers had their own concerns . There were apparently no issues capable of uniting all the shopfloor workers even though they were all members of the workingclass for, as Cavendish notes, `the differences (between them) seemed almost to override the similarities' . These themes are explored in the last part of Cavendish's book which, like Pollert's, describes a dispute that occurred while the author was there . Pay increases were at stake and Cavendish emphasises the seriousness of a strike for women whose take-home pay was too low for a single person to live on : it was `married women's wages' . Most single women had to take a second job just to make ends meet . The story of the dispute is one of women taking action despite continual harassment from their own union officials . These officials had always been seen as : `part of the firm's authority structure along with management, and equally remote' . The role of the Works Committee during the monthlong action reinforced the women's distrust . When the women involved were suspended from work the initial solidarity was systematically eroded by the Works Committee's insistence that : `there would be a vote every few hours about reviewing

CAPITAL AND CLASS the decision to stay out' . In the end the Committee achieved a return to work at a meeting that Cavendish describes as : `a classic and successful divide and rule - bringing in people who weren't involved and offering them something for nothing which they would naturally accept, and then using this against us . No one was really surprised - they expected as much from the Works Committee' . The women hardly gained financially and were left depressed and divided, once again into ethnic groups, as a result . In sum, Cavendish's experience of factory work left her pessimistic about the possibilities for uniting a working-class that is fundamentally divided. Work, Women and the Labour Market

This is a collection of articles around the theme indicatedby the title . Like most such collections, it has problems of coherence and integration . For example, having read several contributions which expose and criticise the ways in which trade unions actively exclude women and how childcare responsibilities force mothers into the `black economy', we find Judith Hunt's essay, `A Woman's Place is in Her Union', extolling the virtues of union membership . Jackie West's introduction does not fully succeed in providing a framework that resolves these inconsistencies . Nevertheless, several of the individual articles are worth considering . The two most relevant to the overall theme of this review are those by Marilyn Porter and Angela Coyle .' Porter's essay `Standing on the Edge : Working Class Housewives and the World of Work', shares with Cavendish and Pollert an interest in the way in which the consciousness of working-class women is shaped by their domestic role, by their identity first and foremost as housewives . The article is based on a sample of 25 working-class women all of whom were married and had dependent children under the age of sixteen. None of the women worked full-time, most worked part-time, and all were dependent on their husband's wage . Porter claims that these women `represent the paradigm of working-class women in a capitalist soceity' . Porter succinctly states her conclusion as follows: `Women's experience of work is significantly different to that of men, and I want to suggest that the difference rests upon a sexual division of labour rooted, outside work, in the family' . Because men are still the designated breadwinners and women's primary focus is the home, `when women enter the labour market they do so as migrants from the domestic domain and it is that fact that crucially differentiates their experience of work'. As a result, women regard their own paid work as quite

WORKING WOMEN different from their husbands, finding it hard : `to transfer their own experience of work in an "imaginative extension" to that of their husbands'. This was exacerbated by the men's attitudes to telling their wives about their work : some thought they had no business to know whilst others thought their wives would not be interested . Or, at least, they would only be interested when the pay packet might be affected . So, Porter comments : `the women were expected to have only the narrowest of economic interest in their husband's jobs . . .Any notion of class solidarity . . . is completely absent'. This is further evidenced in the women's ambivalent attitudes to the counterdemonstration by the Cowley wives in 1974 . In Porter's interviews the women expressed sympathy for the demonstration because the unions posed a threat to next week's housekeeping. As housewives, the women shared a preoccupation with consumption and prices . Porter sees here the `chasm between the two worlds' in which `there appeared to be no immediate way these men and women could unite in common class concerns .' Angela Coyle's excellent article entitled `Sex and Skill in the Organisation of the Clothing Industry' is in the tradition of Braverman's work as taken up by Phillips and Taylor (1980), and Cockburn (1981) . The argument is concerned with the way in which distinctions of skill in women's and men's work have as much to do with job control and wage levels as they have to do with technique. The article aims to explain why women are still concentrated in unskilled and low-paid work within the clothing industry . Coyle sees the answer in the forms of organisation of the labour process itself: `To perceive women's marginalised relation to production as a consequence of their "dual role" and a discriminatory labour market is not enough, and here the concentration of women in low-paid work is placed within the context of the deskilling of the labour process' . This statement also reflects on the shortcomings of previous studies of women workers - to which I will return later in this article . The history of the clothing industry since the war exemplifies for Coyle, the way in which a craft-based industry has been deskilled, resulting in a changed labour process and labour force. It is a history that shows a deterioration of wage and employment levels for all workers; but for women this is compounded by the effects of the trade-union's defence of male jobs and wages. Furthermore, the short-term interests of male trade unionists to segregate women into certain jobs

CAPITAL AND CLASS coincided with those of management : `strategies employed by management to exert a downward pressure on wages, combine with union strategies to resist that, to have the effect of reinforcing sexual divisions within the labour process' . In conclusion, Coyle questions the value of `orthodox' strategies for the improvement of women's position as follows : `Exclusion and the preservation of sectional interests, the de fence of skill and differentiation, have always been ways in which skilled workers have organised to protect themselves . As a form of job control it is conservative and gained at the expense of others'. Neither, Coyle argues, has it been particularly effective . As management go on the offensive, skilled labour is increasingly under threat from low-paid labour . Indeed, section union practice by its very nature encourages this - endorsing the creation of a cheap, unskilled labour reserve, for short-term gains. `Women are employed on terms which place them in an antagonistic relation to men, and yet men's defences against the threat of cheap female labour operate divisively and precisely reinforce the conditions which make women such a threat' . Developing our Analysis

All three books, then, have a lot to offer the socialist-feminist study of the relations of women to paid work . Nevertheless, four overall problems with our theory are reflected in these empirical studies. It is to these I should now like to turn . Women and Men Socialist-feminist theory, with its focus on women's subordination, has necessarily stressed what is specific about the position of women in paid work . But this healthy emphasis on the difference between the actual situations of women and men has had an unfortunate counterpart at the level of theory - a tendency to overemphasise the differences between women and men by treating each sex as a homogeneous group. The study of work has proceeded along sex-differentiated lines, resulting in certain factors being defined as appropriate in the study of either women's work or men's work, but not in both (4) . Typically, a `gender model' has been adopted for the study of women's work . In this model, women's relation to employment is treated as derivative of their family experiences . Simultaneously, men's work is analysed using a `job model', in which men's work attitudes and behaviour are seen solely as the consequence of their occupational experiences .

WORKING WOMEN This approach to theory prevents us understanding either women's work or men's work . Neither the family nor gender fully account for women's experience of work . If the gender model is the only analytic tool we apply, we are often left asking the spurious question `what makes women workers different from workers in general?' with the latter group taken implicitly to be male . For men's relation to work cannot be understood in isolation from their family responsibilities and priveleged domestic position . Rather than a gender model applied to women's work, and a job model applied to men's work, we need a gender and job model applied to both men's and women's work . None of the studies reviewed here succeeds in doing this . For example, Cavendish argues that for women workers: `family and homes were the important things in their lives . . . you want a happy home life to make up for the work' . Pollert and Porter similarly make statements about how: `all these women saw their primary focus as the home' . While it is true to say that for women the family still is in certain respects the area of prime importance, such unqualified statements are unlikely in fact to distinguish women from men. In a recent survey of unqualified male manual workers in a wide variety of jobs, almost 90% of married respondents rated a'good family life at home' above enjoyment of their work life (Blackburn and Mann, 1979) . That men also put `home' first is completely ignored by these studies because of their use of the gender model. This shows the need for a single account of job and gender factors and how they operate for women and men. Whereas `gender' and `job' models emphasise dissimilarities, the examination of important similarities between sections of male and female workers is now overdue . For example, it may be the case that, in terms of their experience of paid work, full-time women workers without dependent children have more in common with similarly placed full-time men than with part-time women workers. The problem has its parallel in discussions of class consciousness . There is an assumption that women's class consciousness lags behind a male working-class consciousness . The latter is implicitly taken as the `standard' from which deviations are measured, but its character is never explored . This is the case even with those authors who are concerned to explode the myth of women's conservatism - the male paradigm is seldom acknowledged, let alone demolished . This can be clearly seen in Porter's article, where she sets herself the task of explaining why the consciousness of the women in her study was different from their husbands . WhereC& C 18 - J

CAPITAL AND CLASS as all of the husbands were union members and many of them even shop-stewards, we are told that women mostly rejected unions as irrelevant to them and as more to do with men (and this is taken more as a sign of their backwardness than of their astuteness!) . So what Marilyn Porter is doing is trying to account for the difference between women's `regressive' attitudes and men's `radical' one's by reference to the women's family position . The women's work identity, she says, is derived from their identity as housewives . They don't identify with their husband's politics because they don't identify with their position as workers. But why should we have expected the women to share their husband's experience and consciousness of work? The only answer Porter provides is that they are the wives of these men . Surely, though, the differences between the husbands' and wives' experience at the workplace might be just as crucial as gender in accounting for differences in their consciousness . Would it not be more illuminating to consider these women's work consciousness in relation to men in similarly low-pay sector jobs? Porter's aim is to challenge the myth of women's inherent conservatism . However, by assuming that it is legitimate to compare the consciousness of all women with all men, gender per se emerges as the crucial determinant of women's consciousness . In a similar way, Pollert says that the nature of women's consciousness is due to `women's involvement in the separate spheres of production and reproduction' . She argues that women's consciousness is contradictory, rather than backward, as a result. In an ambitious attempt to make sense of this most difficult of issues, Pollert invokes Gramsci's notion of `common sense', which `even in the brain of one individual is fragmentary, incoherent and inconsequential' . But she does not elaborate on the notion of common sense and, in her use, it is effectively synonymous with `consciousness' . Further, to conclude that women's consciousness is contradictory does not distinguish it from men's consciousness (unless one says that it is even more so) . Most of the recent empirical studies of male working-class consciousness have reached the same conclusion - that consciousness is contradictory (Blackburn and Mann, 1975 ; Nichols and Beynon, 1977 ; Hyman, 1973) . In so far as Pollert argues that women's consciousness is different from men's, as does Porter, the specific factor which makes it different and distinguishes it from men's conscious ness is `gender' . But men are gendered too . Discussions such as Pollert's deny the extent to which men's experience is

WORKING WOMEN structured by their masculinity . The promise of socialistfeminist studies is to question the standard conceptions of the sociology of work, but they remain wedded to them - in that the gender model is constructed in relation to the deficiences of a `male' job model in its application to women . The `gender' model merely stands alongside or in addition to the job model and far from questioning its assumptions these studies accept the job model as adequate in explanations of male experience . Home and work Linked to our failure to fuse `gender' and `job' models has been a tendency to study `home' and `work' separately . This is of course standard in the male sociology of work, where exclusive reliance on a `job' model runs hand in hand with in-depth ethnography of the workplace and complete neglect of the home . But despite their theoretical awareness of the importance of home and gender, both Pollert and Cavendish rely exclusively on information collected at theworkplace . This is so despite it now being widely acknowledged that a serious limitation of established studies of male manual workers lies in their failure to go `beyond the factory gates' . I can sympathise with the practical difficulties involved in studying both home and workplace. But this pragmatic problem should not be allowed to turn into an unfounded assertion of the political paramountcy of one over the other. Both Pollert and Cave ndish tend to do this . Pollert ends her book with the standard Engels quote to the effect that the emancipation of women will flow from their 're-introduction into public industry'. Both Pollert and Cavendish include in their final chapters a diatribe on the shortcomings of the Women's Liberation Movement . We are told that the WLM's concern with `changing relationships' and `determining our own sexuality' had no relevance to the women studied and that, therefore, the women's movement should reorient itself 'towards the workplace and away form an exclusive preoccupation with domestic and personal experience' . But these assertions are based on a minimal contact with, and knowledge of, the women's lives outside the factory . Further, much of the conversation recorded at the factory has as its subject relationships with men. These women are clearly very preoccupied with relationships and sexuality, perhaps more so than Pollert and Cavendish were able to discover as self-confessed white middle-class observers of life on the factory floor. Are we to believe that none of the women they studied were lesbians, were battered by their men, had been raped, had been sexually harrassed? - or that these things were somehow irrelevant to

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the formation of their `workplace consciousness'? Ethnicity and life-cycle

A further and related problem of much socialist-feminist theory is that it tends to treat `women' as a homogeneous group . This is often the case even when authors have gone to great lengths to distinguish between women at various points in their studies. This is more striking when Cavendish, in discussing the links between home and work, assumes the similarity of all low-paid full-time women workers. But the very strength of Cavendish's own account is that it points to major differences in the way that women from different cultures perceive and organise their domestic lives. Certainly the articles by Hoel and Phizacklea (in the West collection) about Asian and West Indian women respectively reinforce the importance of ethnicity. Both these articles, like Cavendish's book, contain fine ethnographic material on divisions between women workers and remind us to be cautious of generalising about women workers as such . Aside from their different ethnicity, women differ too in their position in the life-cycle . Life-cycle stages are crucial to the way in which domestic cirumstances affect work ex perience, attitudes and behaviour. The importance of this is indicated by the recent spate of factory occupations in Scotland involving women workers. The women involved in the Plessey occupation this year and the Lee Jeans occupation last year were respectively older women with no dependent children and young childless women. In both cases, their life-cycle position tells us more about their ability to participate in a workplace struggle than general statements about every woman's place being in the home . These life-cycle phenomena, which are obvious in practice, have yet to be assimilated theorectically . For example, having clearly distinguished in the text between the different significance of waged work for the young girls and the older married women, Pollert proceeds in her final chapter to talk about how waged labour creates the potential for all women to gain a new consciousness. Porter distinguishes 2 stages - before and after childbearing - but then ignores even these by going on to claim the typicality of her sample of married women with dependent children . They are not typical . If we were to accept that they were, much women's workplace militancy (centred around women without dependent children) would look like an aberration . Again, what we need is more careful elaboration of the relationship between home and work . The life-cycle, the dev-

WORKING WOMEN elopment aspect of family life, is crucially important to women's relation to employment . And - an even more neglected topic this - we may find that it is of fundamental importance too in men's relationship to their work .' Resistance and shopfloor culture Finally, what of women workers' response to their subordination? I outlined above the valuable acount provided by Pollert of how the women at the tobacco factory created their own shopfloor culture . Factory politics become sexual politics as women use feminity as a weapon against male authority . In their discussion of patriarchal relations in the office, Barker and Downing (1980) similarly discuss the way women have developed a culture of resistance which is peculiar to them as women. `It is within the invisible culture of the office that we find the development of forms of resistance which are peculiarly "feminine" . It is a culture which is contradictory, appearing oppressive, but at the same time containing the seeds of "resistance" . But I think we should question whether it is best to think of this as `resistance' . I have always been rather unhappy about calling the kind of worker response to factory discipline de scribed by Pollert `resistance' . This is not to deny that there is a shopfloor culture and life on the factory floor and even in the office . But are signs of life amongst the workforce in themselves subversive? Shopfloor culture is as much about adjusting to and making bearable the intolerable conditions of most manual labour . If it cannot be said to change and improve those conditions then why call it resistance? Such a notion of resistance crucially lacks a critical and materialist perspective . Such a perspective would need to detail the conditions in which some form of genuine resistance might arise, and would need to understand the structural conditions that inhibit it . If we lack such a perspective we can too easily end up `blaming the victim' (as male Marxists have often done) - failing to see the roots of people's consciousness in their lives, blaming them for being weak and confused . This is particularly damaging in discussions of women workers who are traditionally seen this way. Without knowing if male workers in a comparable work situation would respond less passively, we do not really know what is gender specific about women's response . And, perhaps most important of all, if we as socialist feminists do not understand the roots of change in consciousness, we will not be able to give those changes a helping hand .

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WORKING WOMEN (l) Some of the authors concerned are Barrett (1980) ; Beechey (1977) ; Bland et al (1978) ; Hartman (1979) . (2) Perhaps the best known is Beynon (1973) . (3) Articles which are not mentioned in this review include two on clerical work . Written by Jackie West and Rosemary Crompton et al they deal with the nature of female clerical work and the impact of new technology respectively . Peter Armstrong's piece is about work segregation on the shopfloor, based on fieldwork in a footwear and electrical goods factory. Caroline Freeman looks in detail at how women's responsibility for children leads to their exploitation as parttime workers . She documents the nature of childcare provision and the resulting complex arrangements of working mothers. (4) This `job/gender' model distinction is developed by Feldberg and Glenn (1979) . Thanks to Jan Siltanen for pointing this out to me . (5) 1 have discussed this point at greater length in Wajcman (1981) . REFERENCES Barker, J. and Downing, H. (1980) Word processing and the transformation of the patriarchal relations of control in the office . Capital and Class 10 : 64-99 Barrett, M. (1980) Women's Oppression Today (Verso). Beechey, V. (1977) Some notes on female wage labour in capitalist production . Capital and Class 3: 45-66. Beynon, H. (1973) Working For Fords (Penguin). Blackburn, R.M . and Mann, M. (1975) Ideology in the Non-Skilled Working Class, in M. Bulmer (ed) Working-Class Images of Society (Routledge & Kegan Paul). Blackburn, R .M . and Mann, M. (1979) The Working Class in the Labour Market (Macmillan). Bland, L . et al (1978) Women inside and outside the relations of production, in Women's Studies Group Women Take Issue (Hutchinson) . Cockburn, C . (1981) The material of male power. Feminist Review 9: 41-58. Craig, M. (1981) Office Workers' Survival Handbook (BSSRS). Feldberg, R. and Glenn, E. (1979) Male and female : job versus gender models in the sociology of work . Social Problems 26: 524-538. Hartman, H. (1979) Capitalism, patriarchy and job-segregation in Z. Eisenstein (ed) Capitalist Patriarchy and the Case for Socialist Feminism (Monthly Review Press) . Huws, U. (1982) Your Job in the Eighties (Pluto). Hyman, R. (1973) Industrial conflict and the political economy, in R. Miliband & J. Saville (ed) The Socialist Register (Merlin) . Nichols, T. and Beynon, H. (1977) Living with Capitalism (Routledge & Kegan Paul) . Phillips, A. and Taylor, B. (1980) Sex and Skill - notes towards a feminist economics. Feminist Review 6: 79-88. Wajcman, J. (1981) Work and the family, in Cambridge Women's Studies Group Women in Society (Virago) .

NOTES

Getting it write

AT THE CSE conference in July, one work-

shop attracted quite a bit of attention . It was a 'teach-in' on how to write more clearly, led by Eva Kaluzynska, who ealier this year gave the Capital & Class editorial group a session on how to rid the journal of pomposity and obfuscation . . . we are trying! This issue, C& C has a new design . We want to use good graphics to get good ideas across . It seems the right moment to turn over a new leaf on language too . We asked Eva, who is sub-editor on a national newspaper and active in the National Union of Journalists, to summarise her talk so that we have some guidance in print to which we can point our writers and with which we can remind ourselves. We want socialist ideas to become part of the common sense of our age, says the Socialist Society . Yet they are so often expressed in an elaborate code that restricts access to them, a `leftwrite' which the newcomer cannot decipher . How often have you felt or heard others say they feel excluded, bored, put down or up-staged in situations that are intended to nurture or develop socialist ideas and activity? Apparently even the cognoscenti find much socialist writing difficult and off-putting, though there is evidence that there comes a point, as

with cigarettes, when the experience stops being revolting. Readers of this journal may have ceased to notice unnecessary political jargon, flights of obscurantism and lazy academic drafting . Worse, they may have been responsible for such things themselves, here or elsewhere. `For socialist ideas, and a socialist alternative, to gain wider credibility and commitment we must seek a systematic public voice in the media of communication and education' Socialist Society. Well, yes, but as long as that `voice' has things like this to say, it will go on talking to itself : `The major task now confronting us is to rejuvenate and enthuse the spirit of socialist theory and practice in a challenge to the exploitative structure ideologies of and oppressive contemporary British capitalism itself'. Socialist Society again . Serious and important ideas too often come looking about as tempting a read as an out-of-date telephone directory . It seems expected that we should have to work punishingly hard to grasp them, though I have seldom felt ennobled by what I shall try and show is superfluous labour . Few of us think critically enough

GETTING IT WRITE about the form of what we read and what we write . We think of content as political . We must recognise that form too is political . Ignore this and our ideas will continue to look old-fashioned or too `academic' especially to younger readers for whom '68 is a meaningless cypher . We must write with more imagination, more care, more respect for the reader if we are to bring to that perennial `major task now confronting us' anything other than more stale formulas . Many texts could be improved by correcting simple errors of English grammar. But my main criticism is not of socialists' `bad English' . In fact, a style that slavishly observes all the rules can sound dull and old-fashioned . More important is simplicity of structure and vocabulary . In pulling to pieces the examples that follow, I have used relatively few grammatical terms, as I didn't feel labels would be that helpful, and I would have had to have looked them up myself anyway. Instead, I have relied on a feel for sense. Neither of the types of division of labour that Marx describes as operating within commodity production the a priori division of labour between workers employed by an individual capital through the organising control and authority of the capitalist, and the a posteriori social division of labour between workers employed by different capitals, which, though the market, operates via the coercive force of competition - neither of these divisions of labour touches domestic labour . A long convoluted sentence often reveals a convoluted train of thought. There are no frank grammatical errors in this sentence . All the individual words are apt and make perfectly good sense. But it is a cumbersome compilation of

GETTING IT WRITE statement and background, using 72 argument could well be put off by the words. sight of these italicised signals in an interLook at it closely and you'll see it's a national language of the learned while sandwich . It has a huge parenthesis as they having trouble with `difficult' the filling in a sliver of statment that has English. been split to accommodate it . Even the Unrelieved slabs of small, grey type authors doubted its readability . Because across a wide measure can look very the sentence is split, and because of the daunting, which is why I tried dividing distance between the two ends of the the material into shorter paragraphs . statement, they have felt it necessary to There is no single best way to rerepeat themselves . arrange or write such things . My example `Neither of the types of labour . . . is intended merely to illustrate possible neither of these divisions of labour . . .' ways of doing so, and leading a willing There are several alternative ways of reader to the point. reorganising the material to make it read That example is from an academic more clearly. One, the most obvious, journal with which readers of this one would be to start with the statement may well be familiar . The following is `Neither of Marx's two types of division from a textbook that says it is `mainly of labour touches domestic labour' . This written for students who come to could be followed with an explanation as economics in the expectation of gaining to what each of the two divisions involves . an understanding of how economic Another structure might involve lay- society functions and who have become ing the groundwork for the statement disillusioned with the subject' . before making it . I think this the better If they get as far as page 152, their type of solution here . The statement quest for an alternative will lead them to could come as a punchline in a scheme this extract from a paragraph of some 200 something like this : words, 3in long and 4 in wide . Marx described two types of division Because he must believe in a natural of labour as operating within comequilibrium for capitalist society, he modity production . cannot reconcile himself to the notion One is that which the organising that there may not be an `equilibrium control and authority of an individual real wage', that the workers may not capitalist exerts in dividing labour be prepared to accept a wage conamong workers employed by that venient to capital while the objective capital. situation gives them sufficient strength The other is the social division of to fight, that they demand wage inlabour between workers employed by creases which are `excessive' not from different capitals, which, through the the point of view of their needs, but market, operates via the coercive rather the need of the capitalists' force of competition . system for sufficient profits. Neither of these divisions of labour `He' refers to Milton Friedman . Anytouches domestic labour . one familiar with the argument and The sentence is now split in four. The sympahetic to it may be carried through material is organised into a series of steps the confusion by force of sheer goodwill . rather than a loop . But the chances of persuading wavering I have omitted the distinction readers to read from beginning to end, emphasised in Latin . Many readers who let alone agree, are severely reduced by are perfectly capable of following the the effort required to understand how

GETTING IT WRITE the elements of the sentence are supposed to connect. We need a strong contrast between the alleged needs and interests of the capitalist and those of the worker to bring the opposition between them clearly to view . Without that, the author's opposition to Friedman remains comprehensible to most readers only on an emotional level . A more carefully assembled structure could achieve that opposition . Try stripping and reassembling the sentence now . The habits that produce such muddled, if well-intentioned offerings mean that writers lack the flexibility to vary the mood of a text, for example, by using humour . Take the following clumsy example: Prices increased by 2 .4 per cent . The Government made much of the fact that the bulk of the latter rise was accounted for by increases in the prices of `seasonal foodstuffs' . This information was as comforting to workers as would be the disclosure to those unemployed during the winter months of the fact that viewed in ,seasonally-adjusted terms', they were in work . Here is a possible tightened rendering : The government made much of price rises being due largely to seasonal foodstuffs costing more . It might as well have told workers unemployed during the winter that, viewed in .seasonally-adjusted' terms, they were not on the dole . There are 63 words in the first version, 38 in the second . The original has been pared down to a sharp point. Only superfluities are lost . Conscious application of such staple editing techniques can ease, encourage, cajole the reader through an argument . It is the responsibility of the writer to use

them when drafting . It is unreasonable to expect an editor to compensate for inattention and laziness . The writer that relies on someone else to that extent may later find cause to complain that the original intention was damaged in the laundry . I cannot hope to do more here than sketch ways of encouraging clearer, more accessible expression . Below are some of the less desirable mannerisms I have noticed recurring in this journal and in other writings its readers will be familiar with . I hope this checklist will help Capital & Class writers and readers to see themselves as others see them and encourage clearer ways of writing. Active forms of the verb are almost always better and livelier than passive ones . `The dog bit the lecturer', not `the lecturer was bitten by the dog' . Use verbs rather than nouns to get ideas across . As the active bit of language, they're rather good at it . `The dog bit the lecturer, who had to go to hospital', not `There was an urgent necessity for the hospitalisation of a lecturer who sustained a canine dentallyinflicted injury from a pet poodle' . Acronyms are out unless instantly recognisable. TUC and UK are OK, PZPR (Polska Zjednoczona Partia Robotnicza) and PFSN (planning for social need) are not . AES, CSE? Try `the strategy', `the conference' . There are almost always ways of avoiding the difficulty and readers will feel articles just aren't for them if unfamiliar cyphers pepper the page . Fashionable jargon changes with the seasons, but usually manages to sound coy, mannered, and then after a point, dowdy. `Critiquing' appears to be passe now, but there's a lot of `prioritising' around .

CAPITAL AND CLASS Short, simple words get less tired of being read than long ones and throw into relief the pieces where a long word or a technical term really is necessary . In spite of the fact that = although ; approximately = about ; accordingly = so ; absence of = no ; proceed = go ; requiring additional physical and mental concentration in order to achieve satisfactory comprehension = harder to read . Short sentences and paragraphs do a similar job. Unrelieved acres of grey type look very unappealing . Samizdat writers have the excuse of a paper shortage for omitting paragraph spacing. We waste paper that isn't read for want of white relief in the dense argument . Startyour sentence with an element comprehensible in itself . When you begin with `That the . . . ', for instance, the verb usually drops at the end . This means you have to file a whole gobbet of wisdom before you know what to do with it . Similar bad starts in this category : `The question of (an urgent improvement in) . . . .' ; `The implication of the view that . . .' Also avoid `Said to . . .' ; `Having seen . . .', as starts of this type mean you don't find out whodunnit till later. Some readers just can't stand the suspense, so they don't read the sentence. Reverse is, putting the subject first, or at least early: `The Tories, said to have . . .' Check for strings of things tacked together with prepositions : `The notification OF the list OF names BY the council TO the committee AT the meeting IN Birmingham ON Sunday was UNDER consideration BY . . .' Break it up . Try using some verbs instead. In lists of items or ideas, decide what the priorities are and rank them . Serve them up bit by bit, sentence by sen-

tence if necessary . Parentheses, in this context usually lengthy explanations within a sentence (ie, as here, an explanation without which the author considers it impossible to proceed), usually mean you need two or more sentences to do the job . Modify a point without losing sight of what it was. Avoid trying to pack all nuances in the same sentence . . . `even though' . . . `and similar proposals such as' . . . 'unless' . . . could all deserve their own slot . That selection of illustrations all came from a genuine offender . Puns when clever, can be funny. But beware semi-conscious punning that is mere sleight of hand . `The production of human beings is a distinct labour process' . Puns on reproduction have snarled up marxist and feminist theory . Curb cliches and rhetoric . `My point is basically that they have very little impact at all,' said the dreary speaker who wondered why no-one seemed to be listening. Make sure the bits of your sentence connect up properly . `Lecturers must take a discerning position on marxist theory . Swallowed whole, students tend to rebel.' Jonah and the whale? Mixed metaphors, and even consistent ones, need watching . Use sparingly. Concrete investigations? Compound noun situations make difficult notions more difficult to digest by compacting them into dense units. `The rapidly-accelerating deindustrialisation crisis situation' will have most readers indifferent to its outcome. For me, the most striking feature of the kind of socialist writing to which I object is the extent to which people tend to get evacuated from the story, from the very activities with which they hope to change society. `Movements' are sup-

CAPITAL AND CLASS A vital concern for this conference as posed to involve people doing things, yet for other socialist discussions now, as the protagonists in these texts are consocialist principles and ideas seem to cepts, ideas, actions, merely impaled on be further from popular acceptance labels for contemplation . than ever, must be first to make a real This sometimes goes a stage further, commitment to the idea of broadin such a way that the activities and phenomena themselves take on human based involvement instead of merely paying lip-service to it ; second looking attributes . People no longer appear to retain responsibility for actions and reto the implications of this for the forms and practices we use - including the sults . Some examples : The necessity for a broadening of the CSE conference itself and third seeking to discuss and develop ideas and mobilisation against the effects of this legislation is apparent . action to enable a truly popular politics . A turn to building the party among industrial workers is, however, not Eva Kaluzynskaya helped form a nearly sufficient on its own. The struggle to turn the AES around collective of journalists, Leftwrite, that so that it faces not the higher echelons runs occasional workshops on writing, of the civil service, the trade union reporting and editing for activists . The movement and the city- but rank and theme of this article is treated at length in file workers, young people and women the context of the domesic labour debate at home, has already begun. in Wiping the Floor with Theory, Feminist Such habits start, I daresay, in school, Review 6, 1980 . where those responsible for `the sodium Thanks to the C&C collective and having been added to water producing particularly to Cynthia Cockburn for ignition and an explosion' manage to editing with flair and patience . escape from the sentence by pleading scientific objectivity . We must try and avoid these formulae that distance both reader and writer from matters in which we explicitly take sides. We say we want people to join in, but thoughtlessly use a distancing technique that deepens the split between intellectual and activist, thinking and doing. It's difficult to judge one's own writing, and it would be surprising to me if you hadn't thought of improvements you could make to this article by now. I find that the best test of a piece of writing for clarity is to read it aloud. If you can, without stumbling and referring back, READERS AND writers of Capital and and it makes sense to you, then there's a Class may have noticed that there has good chance that it will to someone else been no consistent system of dealing with `footnotes' and `bibliography' - some too. Try it with this plea from the July CSE authors have used one style, some conference papers, then test yourself by another . It will not be possible overnight attempting a rethink. to bring about uniformity, but we want

HOW TO ORGANISE

NOTES AND

REFERENCES

CAPITAL AND CLASS

to try to move in that direction . Below we outline the system we would prefer . Would authors of future article please use it when typing their manuscripts? May we also remind you, as editors, of the following points . Clean typing, double spacing and wide margins are essential. We need five copies of any manuscript submitted. The first paragraph should summarise the argument of the article and explain to the reader why it is worth reading - especially its political and strategic significance for socialists . Use only title ; main headings ; and sub-headings - no sub-sub-heads . Label them A, B and C heads . Please also attach a 40-60 word summary to go on the Contents Page .

NOTES First, there are no `footnotes' as such in C&C. That is to say, there are no small-type notes at the bottom of the text page . Instead, `footnotes' are cued 'by number and collected together at the end of the text, under the heading NOTES. Notes should be used to expand points, not to give sources of information . That is dealt with under a separate section called REFERENCES (see below) . Occasionally, of course, a `note' will include reference to another book or article. This should be dealt with exactly as for a reference in the main text . REFERENCES We plan to use a modified version of the Harvard system . It is based on the principle that you minimise the amount of page-turning necessary, by including the name of the author in the text . In the text will appear the following kind of cue: argued Hartmann (1979) has

that . . . (or) A reent feminist critique (Hartmann, 1979) has made the point . . . If you are quoting from another work, again give the reference, including the page number, in the text, thus : `like the marriage of husband and wife depicted in English common law : marxism and feminism are one, and that one is marxism . . .we need a healthier marriage or we need a divorce' (Hartmann, 1979 :1) If you refer to a number of authors : . . .as has been argued by several people (e .g . Baran, 1957 ; Frank, 1969 ; Amin, 1975) If an author has more than one publication in a year, use small letters to distinguish them : . . as argued in Frank (1969a) . . . In the REFERENCES, as they are collected at the end of the article, the works should be listed in alphabetical order of author's surname . Begin with the author, followed by the date in brackets . Titles of articles and chapters of books will have only the first letter capitalised, whereas in the titles of books and journals the first letter of each major word should be capitalised . Underline the title of books, and the title of journals and periodicals, so that these will be italicised in the printed volume . Place the publisher's name in brackets . Use as little punctuation as reasonable . Examples : Coyle, A . (1982) Sex and skill in the organisation of the clothing industry, in J. West (ed) Work, Women and the Labour Market (Routledge and Kegan Paul). Frank, A .G . (1969a) Latin America: Underdevelopment or Revolution (Monthly Review Press) . Hartmann, H . (1979) The unhappy marriage of marxism and feminism : towards a more progressive union Capital and Class 8.

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