Capital & Class. - 1986. - Issue 30 issue 30

Sol Piciotto Ten years of Capital&Class

This issue marks the tenth anniversary of the production of Capital and Class . During that time the journal has played a leading role in the development of important academic and political debates on the left . On the occasion of this anniversary issue Sol Picciotto presents a personal view of its development and its contribution to a number of significant debates . In presenting this view he suggests that the current situation raises important opportunities for the development of the journal .

Capital & Class

marks the tenth anniversary of the publication of Capital & Class . I have been asked by the present Editorial Committee to contribute some reflections on the development of the journal, as one who was a member of its first editorial group, and who has continued to be involved, both with Capital & Class and with the Conference of Socialists Economists (the CSE) . Capital & Class was the successor to the CSE's Bulletin, which first appeared in late 1971, nearly two years after the CSE's founding conference . The Bulletin was circulated only to members and appeared somewhat irregularly . It was typed on A4 paper, and printed first on stencils, then by xerox, and finally by litho-print . The first few issues were produced, with some difficulty, by members of the Brighton CSE group, but after 1973 the typing and printing was taken over by Barbara Coysh in Oxford, who had to put up with not only low pay but also erratic production schedules . Nevertheless, two or three issues a year were published, and the CSE Bulletin is still generally acknowledged to have been an important open forum for Marxist debate ; there is still a demand for copies from libraries, for example from Japan, and we have occasionally considered a reprint . Articles in the Bulletin reopened some of the key debates in value theory : not only the question of the relation between value and price and the 'transformation' problem (which continues to surface in Capital & Class), but many of the key issues of the Marxist analysis of capitalist accumulation and crisis - for instance, productive and unproductive labour, the organic composition of capital and the tendency for the rate of profit to fall . It also contributed to the development of Marxist discussion on many other crucial issues, including imperialism and

8 THIS ISSUE

the internationalisation of capital, women's domestic labour, the labour process and the theory of the state . Both the form and the content of the Bulletin reflected the nature of the CSE as an organisation, since, quite importantly, it was the organisation that had come first (Radice, 1980) . Unlike some other leftintellectual ventures, notably New Left Review, the publication of the journal was seen as only one, although an important, aspect of the stimulation of collective debate in its relation to political action, which was the purpose of the CSE as an organisation . It was at the 1976 conference that the decision was taken to launch Capital & Class . It was to continue to be the journal of the CSE (and still carries this subtitle), so that subscribers are also members ; but for the first time it was to be sold through bookshops, and to be typeset and printed . From the Bulletin we inherited about 350 UK and 250 overseas members and 100 library subscriptions, all at £6 .00, as I remember . Our aim was to sharply reduce the price to members, but increase the library subscription, and by increasing the number of individual members to take advantage of the lower marginal costs of printing . After some discussion, the full rate for UK members was set at £2 .50, with a low-income rate at £2 .00, an overseas rate of £4 .00, or £2 .50 for low-income, and an institutional rate of £9 .00 . The bookshop cover price was set at £1 .00, although after the wholesaler's and bookshop margins we would receive less than average cost at the initial print-run ; here again we thought marginal-cost pricing was justified, as a means of building up circulation, although the expectation was more that public exposure would increase subscribing members rather than lead to great single-copy sales in bookshops . This public launch was greatly facilitated by

Ten years on the growth of a small network of radical bookshops and a wholesale distribution co-op which had initially been set up by a group of radical publications . CSE hoped in this way to consolidate its early succes in establishing a journal based on collective work in an open organisation . The aim was that through low membership rates and public circulation the journal should not be confined to an academic ghetto .

Production procedures and collectivity These aims were also embodied in the structure of the editorial committee and organisation of the editorial production work . The 1976 conference had agreed to set up a relatively small Editorial Committee of 8 people, which was intended to be a tight working group meeting regularly . This group was elected, on the basis that half would retire each year. The intention was to ensure some continuity, while limiting each person's commitment to what was expected to be a relatively timeconsuming task to a manageable two years . The election of the editors was also important in ensuring that the group would not be a self-perpetuating clique . Membership should result from the involvement of those elected with activities and with networks of people to whom in some sense they would be accountable . This principle of networking was also behind the setting up of a broader Editorial Board, which was intended to meet infrequently, and discuss general issues related to the journal and its policies . The membership of this body was to include overseas comrades, to reflect the international composition of the CSE, and representatives of sister journals, as well as of CSE working groups and local groups . The system of election of the Editorial Committee has I think been a complete

success . It has meant that in the first ten 9 years over 50 people have played their part as editors ; no-one has done more than one two-year stint, and the journal has both maintained continuity as well as drawing strength from the continual infusion of new editors . I can think of no other journal, socialist or bourgeois, that has been produced so successfully on the basis of such a broad level of involvement . That it has been is a tribute both to the strength of the CSE and to the commitment of all those who worked so hard to make this collective system work . Perhaps the only problem with it has been that, from the beginning, the occasional person has been elected to the Committee without a full realisation of the level of commitment or amount of work involved . A committee of 8 is already such a small number that it cannot afford to carry a passenger, and it has fairly often been felt necessary to co-opt one or two others (usually those next in order of votes received at the editorial election) to share the load . While there has been a broad direct involvement in the editorial process, we have been perhaps less successful in establishing procedures for indirect involvement, accountability or feedback . The Editorial Board, although a fine idea in principle, cannot be said to have worked well in practice . A couple of meetings were held in the first year, and I think that subsequently another attempt was made, but on each occasion it has been hard to define a workable role for such a Board . Since it is essentially consultative, while the Editorial Committee is a very tightlystructured collective which is concerned with actually doing the work, it is hard to avoid such Board meetings becoming mere pointless discussion ; yet clearly such a body with no real responsibility cannot be given any policy-making power . Some broader involvement in editorial

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10 processes has been achieved through the system of external refereeing of papers prior to decision . This has involved a large number of people in advising on papers, in addition to the already large number of editors over the years . However, it cannot be claimed that to be sent a paper for refereeing is much more than a chore, since the referee is given no idea of the editorial context in which the decision on whether to publish is to be taken, and is not usually informed even of the fate of the paper . My own view has always been that the key element in maintaining adequate collective involvement in the editorial process is the production and wide circulation of a careful listing of papers under consideration . This is much more difficult to carry out than one might suspect, since it is not always clear when and in what version a paper is actually formally under consideration . It is often tempting therefore for the editor responsible for the list to itemise it in a relatively casual fashion, which creates the impression of thorough familiarity on the part of the compiler while often creating some puzzlement for the recipient of the list, even if s/he is an active member of the editorial group . The often mysterious nature of the list then makes its wider circulation (say, to anyone asked to referee a paper) somewhat pointless . Broad involvement in and some accountability for the editorial process is important for many reasons, but perhaps principally to combat the tendency towards private and competitive intellectual production . This is not to over-idealise collective writing : too many people have sweated too much blood trying to write in a group to retain any false notions of that (although at its best collective writing can be incredibly rewarding) . But presentation and discussion of drafts and the circulation of comments and replies to papers are a

vital part of the development of a lively intellectual culture . Naturally, the CSE itself provides a forum for this for much of the material that is eventually published in Capital & Class, which has come through a CSE group or been presented at the Conference . The Editorial Committee has always encouraged the early submission of papers in draft, so that editors can also be involved in this process . However, the journal is not the exclusive mouthpice of CSE members, and many papers, for one reason or another cannot or do not go through this process . It is for these papers that the process of refereeing itself is important . Therefore the journal's policy has been to take seriously its responsibility to authors, and communicate a clear decision with constructive comments within no more than two or three months . While this aim has not always been achieved, I think we have a better record and reputation in this respect than many journals . It is also important to maintain the principle that referees' comments should be sent to the authors with the name of the referee . However, it cannot be pretended that it is easy to combat the private-competitive tendency, and many personal and political friendships have been bruised or broken by the less than enthusiastic reception of a piece of writing to which the author has devoted many hours of concentration and a good deal of intellectual commitment . From the beginning too, the Capital & Class Editorial Committee took on the responsibility not only for the editorial process, but also for the supervision of much of the typesetting and production . Since the CSE is itself the journal's publisher, typesetting and printing have been contracted out, and the copy-editing and proof-reading, as well as liaison with typesetters and printers, must be fitted in with

Ten years on the other editorial work . Indeed, during the initial launch we went so far, on advice, as to design the journal's layout, cover and typeface style ourselves . While we learned a lot from the experience, and thereby also formed a much clearer idea of what we wanted, there was undoubtedly a great improvement from Issue 2 on, when we employed a designer . Our close relationship with first An Dekker and then Roger Huddle has ensured that, without losing control over production decisions, we have had first-rate professional advice from a sympathetic source . The worst experience in producing the first issue was caused by a complete failure of communication over typesetting, which resulted in an appalling level of typographical errors . Since then much more care has been taken over proof-reading, especially at the crucial final-manuscript stage . Nevertheless, it still happens that the reader can be frustrated by mistakes, for example by the failure of an editor to notice that a source mentioned in the text is not listed in the bibliography . The general emphasis on the Editorial Committee's collective involvement, and its control over production from early drafts of articles through to copy-editing, has demanded a high level of effort and commitment from its members . This unpaid labour has been unstintingly given, and although editors have sometimes wondered why they let themselves in for the work, they have, I think, enjoyed and richly benefited from the experience and comradeship ; fellow-members of the same committee have been seen greeting each other warmly at conferences, like warveterans . A good deal of the collectivity has, I think, been due to the influential or even dominant role of women on the Committee . Although the first Committee had three women, the editors were almost

entirely male for the next few years . The 11 greater presence of women in the CSE and the role of the women's caucus greatly changed this, and during the 1980s there has usually been parity and often even a majority of women on the Committee . The consequent infusion of the strength of experience of collective work from the women's movement was I think significant . It is noticeable also that it resulted in a design face-lift, and a determined attempt by the editors to improve the accessibility and readability of the journal (Kaluzynska, 1982) . Indeed, the effort and energies of successive editorial groups have been reflected in a continued improvement of both the form and content of Capital & Class .

The C&C perspective In my view, the hallmark of the journal has been the analysis of a wide range of topics of socialist concern and political relevance within a framework which emphasises both the contradictions of capitalist accumulation and the dynamics of class struggle . The title Capital & Class has therefore proved apt . Its distinctive feature has been the integration of theoretical discussion with analysis of specific and concrete problems of political relevance . Articles are often based on either direct first-hand involvement in an issue or situation, or on detailed research and study (and frequently both) . General theoretical debates still continue : not only on basic issues in valuetheory, such as the eternal `transformation' problem, but others such as imperialism and underdevelopment/dependency, monopoly and competition or crisis theory . Nevertheless, the predominant style of article is one that relates theoretical debates to a detailed and well-informed discussion of experience or data . Often

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12 this entails focussing on the situation of specific classes or groups of workers : such as migrant labour (e .g . Miles, 1986), immigrant women homeworkers (Mitter, 1986), or women in the reserve army of labour (Humphries, 1983). Alternatively, the focus might be specific sectors or branches of capital, such as banking and financial capital, which has received much attention ; or information technology ; or industries such as clothing or auto . The strength of the journal has been therefore in bringing to contemporary political debates the perspective of materialist analysis of capitalist accumulation and crisis . For example, in relation to the British debate about Thatcherism and `authoritarian populism', authors in Capital & Class have argued for a rethinking of the terms of the debate by locating it in the context of the decline of British imperialism and the international restructuring of British capital (Spence, 1985 ; Atkins, 1986) . A similar emphasis is apparent in debates on specific aspects of state policy and struggles `in and against the state' : e .g . the NCB and the miners (Fine, 1984 ; Whitfield, 1985 ; O'Donnell, 1985), the local state and industrial strategy (Cochrane, 1986 ; Goodwin & Duncan, 1986, GLC Economic Policy Group, 1983 ; Gough, 1986), or youth training schemes (Goldstein, 1984) . At its best, then, Capital & Class provides excellent analysis based on an integrated view of the political and economic aspects of specific issues . If anything, the emphasis has been more on political than economic questions : for example, there have been a surprisingly large number of contributions on nationalism, both its general theory (see the articles in issue 25), and specific cases (in particular Northern Ireland, but also others such as Israel and the Punjab) . These contributions on the relationship

between nationalism and political economy also form part of the strong internationalist perspective of the journal . Hardly an issue goes by without some very wellinformed contribution, whether on the Nicaraguan economy (Vilas, 1986), Greek agriculture (Manitea-Tsapatsaris, 1986), the struggle in South Africa (Adelman, 1985), women workers in Brazil (Hirata & Humphrey, 1985) or accumulation in Papua New Guinea (MacWilliam, 1986) . These reflect the strong international links of the CSE and its membership . We continue to have a wide international circulation, despite the increasing difficulties of comrades in many underdeveloped countries in getting copies due to foreignexchange problems . In practice, special arrangements can be negotiated for libraries or institutions which find difficulty in obtaining approval for subscriptions for such reasons, and we have treated low-income countries as eligible for the low-income rate offered to low-income individuals in rich countries . Current editorial policy certainly lays great stress in maintaining this internationalist involvement and perspective . Members from abroad have occasionally managed a stint on the Editorial Committee while resident in Britain, but these links could perhaps be further strengthened by some form of corresponding editorship . In other areas where CSE members are also active, contributions to Capital & Class seem less frequent, perhaps notably in feminist theory and practice . This may be largely explained however by the establishment of other journals, notably Feminist Review . Nevertheless, some contributions to Capital & Class have continued to maintain the thread of socialist-feminist debate, especially on issues relating to women in the labour market . It has certainly been a major aim of successive Editorial Committees to do so .

Ten years on If a criticism can be made, in my view it is that Capital & Class authors have succeeded less well in bringing a political perspective to the analysis of the economic than in bringing an economic perspective to the analysis of the political . There has been relatively little discussion of some of the great `economic' issues : the crisis of Keynesianism and the failures of monetarism; inflation, deflation and the causes of unemployment . Contributions on the nature of the crisis have been fairly general in nature and have tended to come from overseas comrades, such as Makotoh Rob, Michel de Vroey or Wladimir Andreff . The discussion of crisis has also, I think, remained the most 'economistic' . This may be due to a number of reasons . Political analysis is perhaps too close to political action to be uninfluenced by immediate and often pragmatic political considerations or political affiliations . Thus issues around the nature of popular mobilisation, parliamentarism, and the role of political parties, have been skated over . This has been so even where they have been crucial to particular debates, such as Labour's Alternative Economic Strategy, or local industrial strategies . Although the tendency has been to stress the class and political implications of these issues and the need to develop their political dimension, the actual analysis of these aspects has not proceeded far . It has perhaps gone furthest in the discussion of important specific areas of popular mobilisation, in particular women, anti-racism and trade unionism . It is a tribute to the strength of socialist debate that there can be said to be a Capital & Class perspective, even though the topics covered in the journal range so widely, and although the authors are many and varied . It is indeed notable that the journal is very far from being the product of a clique of well-known or self-

perpetuating famous names . If anything, 13 editors have been known to bemoan the fact that well-known personalities who are known to be CSE members do not write frequently enough for Capital & Class, and to make efforts to solicit such contributions . On the whole, therefore, one can say that Capital & Class has successfully fulfilled its particular part in developing socialist debate in Britain and internationally . In terms of circulation, its public launching in 1977 certainly proved to be justified : subscriptions climbed rapidly, so that at their height at the end of the '70s they were about twice those for the old Bulletin . Although this was perhaps disappointing for those who had hoped for sales in the thousands, it nevertheless established an adequate membership/ subscription base . This was particularly so since library subscriptions almost unnoticed rose rapidly, some three or four times those for the Bulletin, despite the high differential rate . It is essentially this high level of relatively stable library subscriptions that has enabled the individual rate to remain relatively low, compared to commercially-published journals such as Economy & Society . Bookshop sales were also unexpectedly successful at first, and brought in useful extra income . Some money was lost, however, in the liquidation of the Publications Distribution Coop, and although adequate replacement distribution arrangements were made, bookshop sales have continued to decline . In the harsh climate of the '80s, individual membership has also suffered . Luckily, since our overheads and paid labour were already minimal, we have not been forced to carry out any painful capitalist- (or socialist-) style retrenchment . Unluckily, this also means that we have very little room for new initiatives or growth . A further slow decline down to a hard core of

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member/subscribers would be politically disappointing . There is certainly something of a paradox in the fact that subscriptions have tended to decline somewhat while the journal itself has continued to improve . It is also perhaps surprising that a journal which lays such great stress on its openness and on the involvement of members should have a circulation which, while it is certainly not narrowly restricted, has never broken through to large circulation levels . It has often been said that labour movement activists consider the journal rather intellectually overwhelming, with the suggestion that this may be due to the academicism of style or content . In view of the great efforts that have been made to reduce both of these, I do not think this criticism can hold . Certainly, the articles are mostly longer than those to be found in left-wing weekly or monthly magazines ; but the journal aims to fulfil a different purpose than those do . It may be that the very breadth of the topics covered, and the success of the writers in integrating theory and concrete analysis as well as writing from a very well-informed standpoint, present a difficult challenge to the reader . This may be so, no matter how well-written and jargon-free the style . It should be remembered, however, that Capital & Class has managed to survive and even improve very greatly during a period of intensified struggle . Although in many ways progressive forces have been on the defensive, we should not underestimate the ways in which we have developed our strengths . As regards left journals specifically, there is in fact a far more flourishing scene now than there was a decade ago . There are many ways in which the work of comrades through the CSE and its journal, as well as in sister left-intellectual organisations and groups, could be shown to have stimulated some

of these developments . It is only in relation to the magnitude of the tasks and problems that confront us that we seem weaker . Both in practical organisational terms, as well as through the varied writing which it has published, Capital & Class has over the past ten years made its own distinct and significant contribution to the socialist movement's solutions to those problems .

References Adelman, S . (1985) `Recent events in South Africa', Capital & Class 26, 17-30. Atkins, F . (1986) 'Thatcherism, populist authoritarianism and the search for a new left political strategy', Capital & Class 28, 25-48 .

Brighton Group (1977) `The capitalist labour process', Capital & Class 1, 3-26 . Cochrane, A . (1986) `What's in a strategy? The London Industrial Strategy and municipal socialism', Capital & Class 28, 187-193 . Fine, B . (1984) `The Future of British coal', Capital & Class 23, 67-82 . GLC Economic Policy Group (1982)'A Socialist GLC in capitalist Britain?', Capital & Class

18, 117-133 .

Goldstein, N . (1984) `The new training initiative : A great leap backward', Capital & Class 23,83-106 .

Goodwin, M . & Duncan, S . (1986) `The local state and local economic policy : Political mobilisation or economic regeneration', Capital & Class 27,14-36 .

Gough, J . (1986) `Industrial policy and socialist strategy : restructuring and the unity of the working class', Capital & Class 29, 58-82 . Hirata, H . & Humphrey, J . (1985) `Economic crisis and the sexual division of labour : the case of Brazil', Capital & Class 24, 45-59 . Humphries, J . (1983) `The emancipation of women in the 1970s and 1980s : from the latent to the floating', Capital & Class 20, 6-28 .

Kaluzynska, E . (1982) `Getting it write', Capital



Capital & Class & Class 18, 152-7 . MacWilliam, S . (1986) `International capital, indigenous accumulation and the state in Papua New Guinea : the case of the Development Bank', Capital &Class 29,150-181 . Manitea-Tsapatsaris, V . (1986) `Crisis in Greek agriculture : diagnosis and an alternative strategy', Capital & Class 27, 107-130 . Miles, R . (1986) `Labour migration, racism and capital accumulation in western Europe', Capital & Class 28, 49-86 . Mitter, S . (1986) `Industrial restructuring and manufacturing homework: immigrant women in the UK clothing industry', Capital

& Class 27, 37-80 . 15 O'Donnell, K . (1985) `Brought to account : the NCB and the case for coal', Capital & Class 26, 105-124 . Radice, H . (1980) `A short history of the CSE', Capital & Class 10, 43-49 . Spence, M . (1985) `Imperialism and decline : Britain in the 1980s', Capital & Class 25, 117-139 . Vilas, C . M . (1986) `Nicaragua: the fifth year transformations and tensions in the economy', Capital & Class 28, 105-138 . Whitfield, D . (1985) `Coal : a privatisation postponed?', Capital & Class 25, 5-15 .

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LOCAL ECONOMY LOCAL ECONOMY is a new journal for policymakers and practitioners in local economic development. It is published as a quarterly by the Local Economy Policy Unit . The journal covers :

• economic strategy • the workers co-operative movement • data sources for economic development work,* regional planning • training policy • policies towards particular industrial sectors • local authorities and financial institutions • equal opportunities issues • monitoring larger companies • voluntary sector employment projects • local authorities and the EEC • lessons from international experience • business advice and business development policy Articles are aimed at readers involved in policy implementation and planning . The emphasis is on evaluation, critique, debate and innovation . In addition to feature articles, LOCAL ECONOMY contains : • book reviews • conference reports

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Some macroeconomic omens for Reagan and Thatcher BORN OF CRISIS

s U M

In 1986 official statistics reported to the President that corporate profits in 1985 in the United States had risen to $297 billion . He may not have been very pleased . Even though the profits total was about twice as much as in recession-torn 1982, the average profit rate was still little more than half what it had been in the golden years of the post-war boom . It hardly gave much hope that his policies have renovated the us as a successful arena for capital . At the same time, in Tory UK capital has been enjoying mixed fortunes, with oil companies receiving a profits bonanza while the rest, on average, have struggled on with especially low profit rates by international standards . The collapse of the oil price makes it now a uniformly grim picture . Mrs Thatcher is 17 not likely to be pleased either . Reaganomics and Thatcherism are more than just close friends : like identical twins the ideologies on each side of the Atlantic seen to follow each other in almost every respect . Born of an increasingly

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18 crisis-riddled economy, they constitute attempts to restore the balance of power in class conflict in favour of capital in the us and the UK . Aptly characterised by Andrew Gamble (1985) as the philosophy of `the free market and the strong state', Thatcherism shares with Reaganomics the free-market aims of deregulating and privatising business, reducing and if possible dismantling the welfare state by transferring welfare responsibilities to companies and voluntary bodies, removing hard-won protections from workers ; and, on the other hand, they aim to build up the forces of international and domestic repression, and restore lost authority in other social units such as the family and the school . All thse tendencies have been seen in both the us and the UK. Sometimes events bear an uncanny resemblance : Thatcher and the Malvinas, Reagan and Grenada, then Libya . Both leaders gained second terms, with increased electoral support . And yet the sibling ideologies seem to have grown up to be economically different . Much has been made of the recent contrasting performances of the us and the UK (and Europe generally) . Since 1982, US GNP grew rapidly, creating more than 10 million net new jobs, while the UK stagnated with slow growth and persistent mass unemployment . Specific policy differences have arisen too . In the us the administration fell into the hands of the `supply-siders' who differed from monetarists and from European-type supplysiders not by having more radical freemarket beliefs but in holding a more cavalier attitude to traditional fiscal rectitude . All these groups wanted to cut tax rates, but the American supply-siders argued that you could cut them without waiting for the political opportunity to reduce spending too at the same time . So much is well-known . On the face of

it there need not be much surprise at this difference of outcomes, for the ideologies have been set to work in two very different historical contexts : the UK on the brink of absolute decline, and the us down from its pinnacle of supreme hegemony but by no means out . In this report I shall argue, however, that there are similarities even in the outcomes of Reaganomics and Thatcherism, masked by their apparently contrasting fortunes, that reflect inherent contradictions in the laissez-faire approach to national state policy . The New Right's strategy is a long-term one, and it may still have a while to run . Yet after one and a half electoral terms, it is time to ask whether the figures behind the deeds are beginning to show success for at least some sections of capital . A fair amount has been said of restructuring efforts in microeconomic and social contexts . My aim here is to examine the comparative macroeconomic outcomes as far as the data will allow . In spite of stock markets that have been bullish for some time till now (June 1986), the news for capital does not appear to be good . Macroeconomic strategies Amongst the various contradictory tendencies of the modern period, there are some which derive specifically from laissez-faire state policies . Free markets imply openness to fluctuations, instability and insecurity . The essence of the strategy is the belief that any fluctuations are external in origin, and limited in effect, and that they must be allowed to have their impact (companies to go bankrupt, workers jobless and so on) . But the adoption of laissez-faire within a nation goes hand in hand with the same principle operating in the world market . It opens that country up to the arbitrariness of that market and to the uncertainty of multinational investment . Competition, more-

Macroeconomic omens over, can destroy just as easily as it creates changes in behaviour . Inherent in a national free market policy is the danger that the heavy tidal wave of competition can drown the occupants of most ships before they can put into dock to build bigger and stronger vessels . Even the government itself can become victim of the unfettered market which it has unleashed on the working class . This is not to say that Keynesian interventionist strategies are free from crisis . But, as history shows, capitalism can hide its contradictions sometimes for reasonable periods, especially through the use of a regulating agent (usually the state) . The most successful government strategies, such as the Japanese, German or French, have been modernising ones . The lack of one in Britain has long been at the heart of the relative decline of UK-based capital despite various governments' commitments to manage aggregate demand .' The US economy would certainly have lost its great supremacy of the 1950s whatever its policies . Yet its relative decline cannot now be halted by extreme laissez-faire, while patterns of investment are left open to arbitrary market forces and workers are progressively deskilled . Another contradiction of laissez-faire, perhaps more decisive, is that any policy that entails altering the balance of power is likely to generate opposition that undermines its operation . The struggle over laissez-faire occurs both in the political process and at the place of work, and it is the differing strengths and nature of resistance that accounts largely for differing outcomes between the us and UK . In the us Reaganomics confronted a workforce unaccustomed to real wage rises for more than a decade, and a small and diminishing trade union movement . It was relatively easy to shift the balance of power further in favour of capital without sustained

economic disruption . In his first year of 19 office, Reagan turned on PATCO, the union of air traffic controllers, who had supported his 1980 campaign, and defeated it completely . The demonstration effect on other unions was dramatic . More difficult has been to overcome the political opposition . The us welfare state may be stunted but it is stoutly supported by a heritage of entitlement programmes backed by strong constituencies, which have so far prevented Reagan from collapsing welfare expenses very radically . 2 In the UK Thatcherism was from the start stronger in political than in economic struggle . Most successful have been the strategies of privatising state industries (against muted opposition), selling council houses and centralising state power . At the workplace, however, it confronted a labour force over 50% unionised . The legislation in 1981 and 1983 to remove protection from unions has been just part of the strategy, and the carefully planned confrontation with the miners another . Underlying both, however, was a reverseKeynesian macroeconomic strategy to weaken the power of unions by deliberately creating mass unemployment . Dressed up from the start in the official `Medium Term Financial Strategy', the Thatcher government's approach formally involves targetting intermediate variables, the growth rate of the money supply and the level of the Public Sector Borrowing Requirement (PSBR) . Underneath the public relations, however, the strategies were a sham . Money growth often missed the targets, and, as the authorities searched for something they could control, the definition of the money supply was regularly widened and narrowed . From time to time they ignored their own announced objectives, whenever they were assured that monetary restraint was sufficiently tight . 3 The main point,

Capital & Class 20 rather, of adopting intermediate targets, was that this was the best - or the only way of gaining acceptance of the policies . So much was admitted by John Fforde, an adviser to the Governor of the Bank of England : it would have been possible to initiate such a strategy with a familiar `Keynesian' exposition about management demand downwards, and with greater concentration on ultimate objectives than on intermediate targets . But this would have meant disclosing objectives for, inter alia, output and employment . This would have been a very hazardous exercise, and the objectives would either have been unacceptable to public opinion or else inadequate to secure a substantial reduction in the rate of inflation, or both . Use of strong intermediate targets, for money supply and government borrowing, enabled the authorites to stand back from output and employment as such . . . They were vitally important at the outset in order to . . . enable the authorities to set out with presentational confidence upon a relatively uncharted sea . 4 With such a `presentational' give-away, one needs, it seems, no complex econometric models, nor study of detailed monetary rules, to explain the rise and persistence of mass unemployment - only an awareness instead of the political strategy of intensifying conflict by reducing worker security . The PSBR targets were hit more accurately, as the government tightened its control of spending . But whereas controlling money growth at least had an intellectual basis in monetarism, emphasising the nominal PSBR was illogical. As a statistic it is hopelessly irrelevant as a guide either to fiscal stance or to the potential for inflationary finance . Including asset sales as a negative contribution to it was always

plain silly, and served only to draw attention to the inadequacy of any simple current account statistic for measuring the long-term viability of government finances . 5 The adjustment for inflation alone (see below), discreetly tucked away in the Bank of England Quarterly Bulletin, was enough to show that in reality the budget was in surplus in the early Thatcher years, (thereby further reducing demand) . It may be that eras of intensified class antagonism are prone to calling forth particularly absurd policy justifications . Just as we witness the ridiculous stress on the PSBR statistic in Britain, so in the us an even more whacky theory was proposed : the 'Laffer curve' . In order to support what the New Right's business backers wanted government to do (cut taxes substantially), and to help get Reagan elected, Laffer argued that if the tax rate were cut there would be such a surge of entrepreneurial activity and labour supply that tax revenues would even increase . There was not one shred of evidence for this, as the vast majority of conventional economists testified, but the heavily regressive cuts were enacted anyway in 1981, to be phased in over three years . At the same time, the administration and Congress voted through a military-led expansion in spending . On its own this would have led to a growing economy right from the start of Reagan's stay in the White House . Yet with its separation of state powers, a coordinated macroeconomic strategy is sometimes less likely to arise in the us . That a recession occurred was due to the heavily restrictive monetary policies of the Federal Reserve Board, chaired by Paul Volcker . From 1979 to 1981 the real money supply (Ml divided by the GDP deflator price index) had fallen by about 7%, with particular restraint being observed from the 2nd quarter of 1981 . In addition there is evidence that the money

Macroeconomic omens cial strategies in Japan and parts of 21 Europe . The Boeing deal to cooperate in producing the 7J7 (a new generation of fuel-efficient airliners) is, in Reich's view, one more omen of decreasing us competitiveness, 6 but industrial policy advocates have for the present lost the battle . In Britain the dangers are similar . A confrontationist strategy of trying to reduce wages and relying on the world market to attract investment may not work . Some managements - maybe only a few - have taken an alternative route . Courtauld's decision, for example, to introduce new technology into its spinning mill at Oldham demonstrated the irrelevance of wages in that case, and the overriding importance of a dynamic management geared to competing in the changing market . 7 Other companies, too, have gone through much-publicised reshuffles ." But isolated examples, possibly untypical, do not necessarily help in assessing whether management and industrial relations are being adequately modernised as a whole . The best way to get an overall picture of whether laissez-faire is actually working is to focus on macroeconomic variables which most closely reflect success or failure for capital . For all the overt contrast between the us and UK's recent growth record, there lies underneath a common set of problems, not only in the general sense that both economies are part of the world market and subject to periodic crises, but also in a more specific way The macroeconomic record for capital reflecting the contradictions of laissez-faire Should Boeing be allowed to share its ex- referred to above . perience with the fledgling Japanese airline a) Profits industry that is heavily backed by the The most basic macroeconomic statistic Ministry of International Trade and Industry? Robert Reich, liberal advocate of is the average profit rate : it reflects at the a us industrial policy, argues persuasively concrete level the extent to which capital that market-adjusting processes in the us is achieving its purpose of valorisation . cannot compete in the long-run with the Recent trends in the us and UK are precoordinated business/government/finan- sented in Table 1 . The figures are derived supply policy was more restrictive than it was thought to be at the time, because deregulation of the banks had unwittingly increased the demand for money. Nominal and real interest rates skyrocketed, with a predictable dampening effect on investment and, with an inevitably rising dollar that floated up on the incoming tide of funds, exports plummeted and imports rose . One interpretation of the sharp recession is that it was accidental, caused by the unintentionally tight monetary policy . More likely the Reagan administration was quite happy with the outturn since it reinforced the strategy of weakening the unions . Either way, the contrast with the British macroeconomic conflict is shown by the political pressure exerted by the administration on Volcker to relax monetary restraints after only one year of recession . From 1982 onwards the real money stock, however defined, has risen . Interest rates came down from their historic peaks, military spending continued on up, tax rates to fall . A classic right-wing Keynesian expansion ensued, all the more dramatic for the sharpness of the recession that preceded it . Disingenuously, supply-siders have tried to bask in the rays of the shining economy, but they have had to remain mute or complacent over the burgeoning budget deficit which they predicted would not happen . Old-fashion Keynesians, by contrast, are enjoying a return to the stage .



Capital & Class 22 Table 1 : Profit rate trends

Year

US*

1979 1980 1981 1982 1983 1984 1985

UK** Including oil

Excluding oil

6 6 6 7 9 12 13

5 3 3 4 5 7 8

12 .1 9 .6 8 .9 6 .2 8 .4 10 .4 10 .8

*Corporate profits net of capital consumption (with inventory valuation and capital consumption adjustments) as a proportion of net fixed capital stock at the start of the period . **Trading profits plus rent less stock appreciation less replacement cost capital consumption as proportion of equity plus net debt . Sources : Economic Report to the President, 1986 ; Survey of Current Business, January 1986 ; Bank of England Quarterly Bulletin, June 1985/6 . Table 2: Labour productivy and investment 2a

Productivity growth (percentage annual growth rates) US (output per hour, 198112 till 1984/5) 0 .9

UK (output per employed person, 1979/2 till 1984/5) Whole economy Manufacturing 1 .6

3 .1

Year

Us*

UK

1979

16 .8 14 .7 15 .6 14 .1 14 .8 17 .8 16 .8

18 .9 18 .2 16 .4 16 .5 16 .2 17 .0 16 .4

2b

Gross domestic investment (% of GDP)

1980 1981 1982 1983 1984 1985

*Private investment . Sources : Survey of Current Business, October 1983 and March 1986 ; National Economic Trends, Federal Reserve Bank of St Louis, April 1986 ; Economic Trends, January 1986 ; Employment Gazette, March/April 1986 .

Macroeconomic omens in different ways and are not internationally comparable, 9 but in each country they can be consistently compared with earlier years . In the us, the cyclical average profit rate varied between 18% and 19% in the 1950s and 1960s . As the table shows, us profitability plummeted in the 1982 recession, and by 1985 had still failed to recover its earlier historical norms . Information for 1986 suggests profits have started to fall again . 10 In a forthcoming paper, Samuel Bowles, David Gordon and Tom Weisskopf (1986) argue that the failure of profits to rise in the early Reagan years reflects the contradiction that in order to raise the insecurity of workers and the power of capital over labour it was necessary to lower capacity utilisation . The most recent evidence suggests now, though, that even with a weakened working class and a growing economy Reaganomics has failed to raise the competitiveness of us capital and its profitability . In the UK profit rates averaged about 12% over the 1960s and 6% from 1973 to 1979 . The recent figures do not rule out the possibility of a long-term successful recovery for British-based capital, but seven years of Thatcherism have failed to achieve that as yet : at about 8% return on equity plus net debt, the 1985 level was the same as in 1973 . The oil sector, of course, has thrived on the North Sea windfall, but profits there will have withered when the 1986 figures are in . b) Productivity

These conclusions are reinforced when we turn to evidence on one important component of profitability, the productivity of labour . Table 2a shows a dismal record in the us . Despite the age of high technology there has been little gain even in areas where the use of computers has been most talked about - for example, the office . , "

Overall there has been hardly any growth 23 in productivity . In the UK the picture has looked better, but productivity growth has not regained its performance over the 1966-1973 cycle of 4 .4% in manufacturing and 3 .2% in the whole economy . It dipped initially as the economy plunged into recession in 1980, but companies soon learned that the bad times were not temporary and ceased hoarding their workers . The recession levelled out, and, meanwhile, many less productive companies went to the wall, leaving a higher average productivity for those that remained . These sources brought about the so-called `miracle' of 1982 and 1983, but in the long term the big gains have not proved to be sustained . This is hardly surprising given that the UK investment record deteriorated (see Table 2b) . us investment showed no improvement either, and both countries remained behind Germany (about 21% of GDP) and, even more so, Japan (28%) . According to some estimates by Tom Weisskopf (1985) long-run productivity growth has tended, in the strongly antagonistic industrial relations of the UK, to be enhanced (other things equal) whenever worker insecurity has been raised ; less secure, British workers appear to have less power to control the introduction of new technology, and less ability to resist work speed-ups . But other things are not equal, for productivity growth also has tended to be helped or hindered by the level of output growth and the resulting nation-wide economies of scale . The last few years show these forces balanced against each other . Thatcherism attempts to operate by generating more insecurity, but the muchvaunted miracle failed to appear because it drowned the economy in recession, squeezing out the dynamic scale economies . At the same time, there has been no policy to encourage investment other than blind reliance on the market and some



Capital & Class 24 Table 3 : Real wages and international competitiveness

Real hourly earnings April 1986 ; 1980 = 100

Competitiveness (relative unit labour costs) 1986/7; 1980 = 100

UK*

US**

UK

US

119

101

88 .2

117 .5

*All industries **Manufacturing Source : International Financial Statistics, September 1986 .

Table 4 : Unemployment, inflation and growth

Year

1979 1980 1981 1982 1983 1984 1985 1986/1

US

Unemployment rate

Inflation

5 .8 7 .0 7 .5 9 .5 9 .5 7 .4 7 .1 7 .0

11 .3 13 .5 10 .4 6 .1 3 .2 4 .3 3 .5 (March) 2 .3

UK

Growth of Unemployment real GNP rate*

2 .5 -0 .2 1 .9 -2 .5 3 .5 6 .5 2 .3

5 .1 6 .6 9 .9 11 .4 12 .6 13 .0 13 .2 13 .3

Inflation

13 .4 18 .0 11 .9 8 .6 4 .6 5 .0 6 .1 (July) 2 .4

Growth of real GNP

2 .6 -2 .3 -1 .4 1 .8 3 .3 2 .6 3 .4 -

*Standardised to include an estimate of net unregistered unemployment . Sources : Employment and Earnings, January 1986 ; Survey of Current Business, February 1986; OECD Economic Outlook, May 1986 ; Employment Gazette, March/April 1986 ; Economic Trends, August 1986 .

Macroeconomic omens traditional tax incentives . That investment has failed to respond to the free market is inseparable, too, from that other part of Reaganomics and Thatcherism, the rise of the military budget . Notwithstanding the wider benefits for maintaining capitalist relations as a whole, military spending discourages investment and growth in the long term .' 2 Standing at $253 billion in 1985 in the us, `defense' spending had risen 30% in real terms since 1980, the fastest build-up in its 'peacetime' history, and more real rises are scheduled . In the UK Thatcher pledged to raise military spending in real terms for several years, kept her promise, and thereby ensured that it takes second place in the spending league . These increases must be helping to ruin the chance for productive investments . c) Competitiveness Table 3 shows the effects that Reaganomics and Thatcherism are having on real wages and on international competitiveness as measured by comparisons of unit labour costs in different countries . They present an illuminating contrast . Despite mass unemployment in the UK, companies have been unable or unwilling to enforce wage cuts, while give-backs and other concessions in the us have combined to keep wages in check despite a growing economy . Combined with the falling pound, however, UK productivity growth was sufficient to give UK-based capital a small competitive edge, chiefly over us capital which endured both stagnant productivity and a dollar rising artificially high due to the Fed's restrictive monetary policy . d) Traditional macroeconomic objectives In order to emphasise the direct indicators of capitalist success I have left aside,

till now, the more conventional macroeconomic goals . Although cutting inflation has been proclaimed as the objective, this has for the most part been a smokescreen for anti-working-class policies . Nonetheless, a good record remains important for the legitimation of the governments' policies . 13 Table 4 shows how success could be claimed in fighting inflation - more so in the us than in the UK - and documents the (already discussed) differences in growth . It dramatises, too, the continuing problem for the Tories in that the failure to attract investment means failure to expand jobs . The unemployment rate, edging up yet further at the start of 1986, draws continual attention to their inhumane policies . e) Government finance Macroeconomic conflict over the government budget was not begun by Thatcher and Reagan, but they have seriously intensified it . Neither, however, have succeeded yet in making substantial cuts in spending on social programmes . In the us, spending on `human resources' (the fetishistic official term for Federal social welfare of all kinds) remained at about 12% of GNP from 1980 to 1985, reflecting the strong opposition to the New Right's intentions of massive reductions . In the UK spending on social services and housing" actually rose from 18 .0% in 1979/80 to 19 .5% in 1984/85 : despite some cuts in unemployment benefit levels, state pensions, housing and so on, massive recession has meant great increases in overall spending on unemployment benefit and on supplementary allowances . The ongoing struggle over government spending is part of the current fiscal crisis in its widest sense . The most discussed problem statistic of all, however, is not the level of spending but the us Federal Government Deficit which soared above $200

25



26

Table

a)

5:

The

us and UK budgets

Us Federal budget

(Surplus +, deficit -) % of GNP Year

Nominal

Cyclically adjusted

Inflation and cyclically adjusted

1979 1980 1981 1982 1983 1984 1985 1986*

-0 .7 -2 .3 -2 .2 -4 .8 -5 .4 -4 .8 -5 .0 -4 .3

-1 .5 -2 .3 -1 .9 -2 .9 -3 .9 -4 .8 -5 .1 -5 .1

+2 .5 +2 .1 +1 .4 -0 .8 -2 .8 -3 .3 -3 .7 -3 .4

*Estimate Source : Federal Reserve Bank of St . Louis, Monetary Trends, April 1986 ; J .C . Wakefield, `Federal Fiscal Programs', Survey of Current Business, 66(2), February 1986 ; own calculations .

b)

UK Public Sector Borrowing Requirement

Year 1970-1972 1973-1975 1976-1978 1979-1981 1982 1983 1984 1985

(Surplus +, deficit -) % of National Income at market prices Nominal Inflation adjusted -2 .2 -8 .8 -6 .0 -6 .0 -2 .2 -4 .4 -3 .7 -2 .7

+3 .5 +1 .7 +0 .8 +0 .8 -2 .1 -1 .0 +0 .8

Source : Bank of England Quarterly Bulletin, June 1984 ; Economic Trends, January 1986 ; and own calculations .

Macroeconomic omens billion in 1985 - all the more spectacular since Reagan had promisd a balanced budget by 1984 in his 1980 election campaign . A major factor in world politics, this has been dubbed irresponsible by Keynesians and monetarists alike, and is seen as constituting a crisis in itself. According to the latest revelations of David Stockman, Budget Director to Reagan for four years, the problem arose as an unintended outcome of political struggles .' 5 A born-again supply-sider, Stockman saw the Kemp-Roth tax cuts as a preliminary to the `real' New Right revolution, the dismantling of the welfare state . When this proved impossible he advocated a more sober budget ; but it so happened that neither Reagan nor most of his advisers could grasp the budget numbers, and that at the same time they had become deceived by their own ideology . Reagan refused to contemplate any concessions, either to the tax cuts or to the military build-up : the large deficit arose mainly from this intransigence rather than any deeper economic necessity. Yet however much bungling there may have been - Reagan himself has dubbed Stockman's autobiography a work of fiction - it seems certain that the possible use of spectacular deficits as a fraudulent lever to help enforce cuts against political opposition will not have escaped James Baker, Donald Reagan and other leading members of Reagan's pack . In fact the public emphasis attached to the nominal government deficit statistic is common to both sides of the Atlantic . In Britain cutting the PSBR has been part of the proclaimed rationale for privatisations and cruel cuts in services ; in the us deficits have become the occasion for the GrammRudman bill and other techniques for trying to force through cuts in social programmes . Like drops of blood upon the ground

the us deficit is testimony, therefore, to 27 the struggle taking place . It is a separate question as to whether the deficit is itself undermining the economy and the Reaganomic strategy . Despite the many cries of danger and catastrophe, there are two reasons for thinking that, though there may in any case be a crisis ahead, the deficit would not be the cause of it . First, the nominal definition of a deficit as `outlays minus receipts' fails to capture the true fiscal policy of a government, since it varies automatically with the ups and downs of the business cycle, and since it does not include all resources taxed away from citizens . It requires some adjusting of the government's budget data to see just how much of a conscious demand stimulus is being applied to the economy . Table 5a presents data on the us nominal deficit along with two adjustments - one to give the `structural' or `cyclically adjusted' budget that would occur if output was at its trend rate ; the other to add the inflation `tax' that occurs when outstanding Federal debt is devalued through inflation . Far from being in deficit in 1980, the government was really in surplus, and according to Eisner (1986) this was so for most of the 1960s and 1970s . The two adjustments are sensitive to the specific assumptions chosen, but whatever these are the picture emerges that only after 1982 did a substantial real deficit arise . The inflation adjustment to the UK budget (Table 5b) is equally dramatic : it shows that, even without a cyclical adjustment, the budget has been approximately balanced over the Thatcher years . Inflation-adjusted budget balances have been shown to be good predictors of GNP in many countries (Saunders & Klau, 1985 ; Kaletsky, 1985) . In general deficits tend to stimulate output in conventional Keynesian ways . Thatcher's surpluses, by

Capital & Class 28 contrast, contributed to the UK recession . A second reason to suspect that the us deficits are not problems in themselves is that the public debts to which they give rise remain (relatively) far lower than in earlier successful eras . It is true that, even after the adjustments, the Federal deficit is now large and likely to remain so for some years, Gramm-Rudman notwithstanding . From 1981 (1st quarter) till December 1985 the Net Federal Debt rose from 27% to 38% of GNP . 16 Yet it was 58% back in 1955 and greater still before that . And, apart from history, it is impossible to say what level of debt is intolerable without specifying to what extent the deficits are spent productively or unproductively . Productive government spending which promotes accumulation can ensure greater ability to service future debts . Most fundamentally, to assess adequately the long-term viability of governments as economic units we would need at a minimum a balance sheet of assets as well as liabilities, something which no government statistical service provides . The main possible danger associated with the current fascination with the us deficit is that an ill-timed move to cut it, either through expenditure cuts or tax hikes, could cause a massive recession, particularly if it coincided with a downturn in the economy . The Gramm-Rudman bill, however, has a provision to lapse automatically if recession looms, and the government could still use monetary policy to counteract its fiscal restraint . In short, whether or not there are major crises ahead for the us economy in the next five years, the budget deficit is no guide to us now as to the likelihood of one occurring . Conclusion Thatcherism and, to a lesser extent,

Reaganomics constitute a radical break with past political philosophies . They have been responsible for much suffering, not only for poorer people in the us and UK, but also for the millions in Third World countries who have endured the barbaric practices of imperialism . In this brief report, however, I have attempted not to document this suffering, but to examine the economic practices from the point of view of capital . This approach helps to avoid seeing the new economic policies as mere mistakes, but also to delve into the contradictory tendencies as they are expresed in macroeconomic statistics . As for fiscal crisis, I have argued that the us budget deficit, while a reflection of political conflict, is not at present a fundamental problem in itself . Yet the record on profits, productivity and international competitiveness does not augur well either for British or for American capital . file : fOmens

Notes I would like to thank Arthur MacEwan and Jim Campen for their extensive helpful comments . 1 . See, for example, Fine and Harris (1985) . 2 . Some programmes have suffered badly, for example housing . 3 . See Buiter and Miller (1983), p . 315 . 4 . J .S . Fforde (1983), p . 207 . 5 . Hills (1984) . 6 . Reich (1986) . 7 . Financial Times, 13/3/86 . 8 . For example, ICL ; see Financial Times, 12/ 5/86 . 9 . The denominator in the us measure excludes circulating capital . Evidence suggests, however, that this is a fairly constant proportion of fixed capital over a long period, so the trends shown and comparisons made remain valid . 10 . The Wall Street Journal, 12 May 1986 . 11 . Fortune, 26 May 1986 .

Macroeconomic omens 12 . See, for example, Smith and Smith (1983) . 13 . Moreover, in the us where economic record is a major determinant of voting, high growth helped to ensure Reagan's re-election . 14 . Excludes education ; see cso, `Annual Abstract of Statistics' (1986), Table 3 .1 . 15 . Newsweek, 21 and 28 April 1986 . 16 . Holloway (1986) . References Bowles, S ., Gordon, D . & Weisskopf, T . (1986) `Power and Profits : The Social Structure of Accumulation and the Profitability of the Postwar us Economy', Review of Radical Political Economics 18(1/2) (forthcoming) . Buiter, W . & Miller, M .M . (1983) `Changing the Rules : Economic Consequences of the Thatcher Regime', Brookings Papers on Economic Activity (2), 305-379 . Eisner, R . (1986) `Will the Real Federal Deficit Please Stand Up?' Challenge, May-June, 1321 . Fforde, J .S . (1983) `Setting Monetary Objectives', Bank of England Quarterly Bulletin, 23, June : 200-208 . Fine, B . & Harris, L . (1985) The Peculiarities of

the British Economy . London: Lawrence and 29 Wishart . Gamble, A . (1985) `Smashing the State : Thatcher's Radical Crusade', Marxism Today, June, 21-26 . Hills, J . (1984) Public Assets and Liabilities and the Presentation of Budgetary Policy, mimeo, Institute of Fiscal Studies . Holloway, T .M . (1986) `The Cyclically Adjusted Federal Budget and Federal Debt : Revised and Updated Estimates', Survey of Current Business 66(3), March . Kaletsky, A. (1985) `Deficits don't always hurt', Financial Times, 19 March . Reich, R . (1986) `A Faustian Bargain with the Japanese', New York Times, Sunday 6 April . Saunders, P . & Klau, F . (1985) `The Role of the Public Sector', OECD Economic Studies, 4, Spring. Smith, D . & Smith, R . (1983) The Economics of Militarism . London: Pluto Press . Weisskopf, T . (1985) Class Conflict or Class Harmony? A Study of the Effect of Worker Security on Productivity Growth in Eight Advanced Capitalist Countries . Working paper, Department of Economic, University of Michigan .

N

3 C s Ma

Robert Allen Bob's not your uncle JOHN JUNOR recently suggested in the Sunday Express that Bob Geldof might have done better to have sent to Ethiopia some of the £75,000 he supposedly spent on his wedding . The pettiness of this comment should not come as any great surprise . What is odd, however, is that, nearly two years after Band Aid came on to the scene, such comments are relatively rare and remain generally unacceptable, even to Express readers . Even by the time of the Live Aid concert in the summer of 1985, the pundits were forecasting the imminent downfall of Geldof, unable to believe that the media, and with them the general public, would not turn against him . It would be only too easy, as the occasional article showed, to find corruption and waste, particularly 31 where there was the easy target of a Marxist government available . Nor did it seem possible that someone who broke all the rules of `respectable' media behaviour could survive for very long without cleaning up his act .

Capital & Class

32

In addition, criticisms were beginning to appear of the whole exercise, highlighting the ethnocentric nature of the campaign (Christmas songs and ageing rock stars), throwing doubts on the value of short-term famine relief, and highlighting the dangerous consequences of what Geldof was doing to the way people thought about Africa's problems and the solutions . The whole emphasis of the campaign seemed to be leading at that time to a highly simplistic formula equating Africa with both the Third World and famine . This could, it was argued, only hamper the attempts of others to bring about long-term change, either through the established agencies, existing charities, or the political action of Western governments . To many of the millions who watched the Live Aid concert, such criticisms seemed almost sacreligious or, at best, just petty . For those who went beyond the fact that this was the `greatest rock show of all time' the response was usually that, whilst the events may have been gimmicky, even tasteless, they would eventually lead to change, bring Africa and its problems to the fore, embarrass Western governments, and have a major political impact . Many people felt that, in view of what they were witnessing in the media every day, something spectacular had to be done, and Geldof was exactly that . What did it matter if Geldof's solutions were shortterm, small-scale, and privatised? What, they would have asked the critics, are you doing? A year later, the critics were shown to be wrong in at least certain respects . Much more money had been raised than even the most enthusiastic supporter had predicted . Nine months after the Live Aid concert, donations were still arriving for the Live Aid foundation at about $60,000 a month . The accountant for the Band Aid trust,

which handles the British end of things, calculated that over $100 million had been raised by both Band Aid and Live Aid since the record . In addition, there had also been a whole series of spin-offs as other sectors of the entertainment industry got in on the act . As a result, we had Fashion Aid, Comic Relief, Sports Aid and the bizarre but profitable cookery book produced by Terry Wogan and his Food Aid . With the odd exception, accusations of corruption and misuse of money had been avoided . As for Geldof, he had gone on to greater things, situated somewhere in the public mind betwee a knight and a saint, a folk hero for the 1980s . Even more unpredictably, his activities had led to a general increase in charitable donations to all Third World agencies, in some cases by as much as 100% . Finally, and reassuring to many of his critics, he and his organisation had moved on from their early ideas about famine relief, to a more sophisticated campaign based on long-term projects intended to deal with causes rather than symptoms . Despite all these signs of success, the critics remained, insisting that in the long term Geldof would do more harm than good . In July 1986 Martin Jacques and Stuart Hall, in an article published both in Marxism Today and the Guardian,' posed the question of why the left continued to refuse to throw in their hand wholeheartedly with Geldof Aid . Bob Geldof, they claimed, had become a key political actor in Thatcherite Britain, and the plight of the Third World had become one of the major popular movements of our time . In the process, he had dealt a severe blow to the ideology of selfishness and to the Thatcherite vision of world order . At last there was the chance that altruism and conscience might replace selfishness and greed .

Geldof aid Such a view of Geldof's impact went well beyond the boundaries of earlier critiques which were centred only on his effect on the Third World . The authors were seeing a major shift in political attitudes and behaviour in Britain . Why then, they asked, had not the left latched on to it? Here was a mobilisation of new forces, a previously unreached youth constituency, that was shifting the political centre of gravity . Based on contemporary political culture, and principally rock music, it provided a national and international stage of an unprecedented scale and ambition . As its focus, Geldof was both a talented politician and cultural representative fusing two normally segregated worlds . Here was a situation where direct democracy and participation contrasted dramatically with bureaucracy . Such a movement had, suggested Jacques and Hall, the capacity to transcend international boundaries . These were massive claims, enthusiastically and forcefully put . Here was not just a spectacular charitable act, but a changing of the political agenda . Aid, for once, had become a major political issue . The authors were not unaware of the problems of such a view . They paid some lip-service to the conventional criticisms, for example the limitations of a famineoriented approach, and the lack of understanding amongst most people of the nature of the relationship between North and South . They were also clear that Aid itself cannot transform this relationship and that it will be in the arena of commodity prices, terms of trade, interest rates, and indebtedness, that the real answers will be found . But, they argued, things were improving . We were now shifting away from the image of the African as a passive victim and attention was being drawn to the underlying relationships . Africa was

being moved from the realm of charity to 33 the world of politics . Charity, they agreed, is not enough, but it implies commitment . It forces people to relate to an issue and creates a movement of opinion which can force the State into action . The authors were clearly enthused by Sports Aid in particular . This they saw as a genuinely participatory movement outside of state and formal politics . Here were ordinary people doing something . Moreover, it was something highly admirable in their eyes, linked as it was to what they described as the `growing ecological-environmental consciousness', the `politics of health' . This combination of a concern with the Third World and `one of the most progressive sporting and cultural traditions' provides, they suggested, a potentially powerful political weapon and the foundations of a broadbased, anti-Thatcherite popular politics which might be capable of placing new and dramatic pressures on government to take aid seriously and to act . The left has refused to acknowledge this, or has at best given only grudging support . This is not because of the stated reasons of suspicion about charity and reservations about the way Africa is portrayed, but, claimed Jacques and Hall, because of their conservative parochialism . The movement has come from outside of the left, and the issue is one where the left has traditionally had precious little to say except for slogans . Effectively they were accusing the left of petty jealousy, a result of which is its isolation from one of the mainstreams of national-popular life . How legitimate therefore were their claims? Some are easy to assess, being either naive or disingenous . The idea, for example, that either the Third World or Aid has, or is likely to, become a national priority is clearly ludicrous . Only a week after Sports Aid, designed to have an im-

Capital & Class

34 pact on the UN Special Session on Africa, Alex Brummer wrote in the Guardian that, `The good international feeling engendered by Sports Aid and other voluntary fundraising efforts, which inspired even the most hard-hearted politicians around the world to don jogging shorts, seemed notably lacking .' 2 At that session, the general conclusion was that what the continent needed was a good dose of capitalism, markets and self-help . By August the response of the media and the public to the developing famine in Sudan was lethargic at best . In September, the EEC decided to reduce its Third World aid budget by 10% . Similarly, little needs to be said about claims that Geldof has dealt a severe blow to our society's selfishness . Where their argument does warrant more attention is on the question of mobilisation : persuading a large number of people to do something - whether singing, giving money, or jogging- that they would not normally do . In this Geldof has clearly been both successful and impressive . In particular, he is seen as having drawn into the arena of charitable activity people who traditionally have been loath to get involved, specifically younger people . The important questions here should be `What exactly has he done?' and `How has he done it?' In the huge sums of dollars and joggers that are constantly bandied about, they are sometimes forgotten . Yet this is hardly surprising and sometimes deliberate . The popular culture of which Jacques and Hall talk so enthusiastically is a consumer culture and the movement behind Geldof typical of it . Whilst not detracting from his genuine concern, Geldof's success has been in successfully manufacturing and marketing a product . The product has been professionally packaged, highly accessible, comprehensible, and exciting . But for exactly those

reasons it has the characteristics of many consumer products, and in particular a short shelf-life . Its success has been that of a hit record, a successful film, or the Olympic Games . It may have been bigger and better, but there is no reason why it should be any more substantial . It is like any other product dependent on the marketplace . Its appeal to many people is its very success . The technical splendour, the massive scale, the sheer grandeur and bravado of the idea impress upon us its worthiness . Like many a product, it is consumed because we know it is better . What exactly it is may well be a secondary issue; the means and the ends may easily be reversed . This does not mean that people are not concerned or unaware, but that the mobilisation and persuasion so central to the argument of Jacques and Hall relies on the successful marketing of a concept . To confuse this with genuine political change is a mistake . Intent on finding a pre-election ray of hope, or pursuing some factional dispute within the left, Jacques and Hall have bought the packet and forgotten the contents . Band Aid, Sports Aid, and all their subsequent offshoots are important because they broke through the barriers that other charitable agencies have fought against with limited success . What they managed to create was the first truly effective version of Consumer Aid . Faced with this argument, many might respond that in a consumer society this is the only way to get across whatever it is you want to do . Why not make use of marketing and the media to promote a worthy cause for a change? If it works, why criticise it? The world of marketing, however, is tenuous and unpredictable . The American media and its public quickly dropped Geldof when a new product, `Hands Across America', dashed as it was

Geldof aid

with patriotism, came into direct competition . Scandinavian Tv executives speculated that yet another television aid marathon would be boring . The cliche of the fickle consumer applies as much to such events as it does to the careers of their rock star proponents . But perhaps more crucial than this was Geldof's own realisation that the product he started off selling was the wrong one . As his experience and involvement broadened, famine and its relief became less central . This was not necessarily because they became less immediate, but because he now perceived the need for a long-term strategy . Increasingly, his energies and money began to be directed into long-term projects that were aimed at preventing famine . By April 1986, 60% of Band Aid money was going into such work . But the change came much too late . Whilst £28 million has gone into famine relief so far, only half of that figure has gone into preventative projects . At the same time, this new approach has received little public attention, tucked away in news reports or featured on late-night television . To a large portion of the media and the public, Geldof is still about providing food for the starving people of Africa . The product he would really like to market, long-term development, has not proved so sellable . The current response to such criticisms ranges, as in 1985, from the supportive to the venomous . A common view is still that, despite all the possible reservations, Geldof has at least done something . The fact that the World Bank calculated in April this year that Africa needs at least $20 billion dollars a year to restore its 1980 levels of imports/person and to achieve an annual 3-4% real growth in GDP by the end of the decade, is seen as being beside the point . Such figures are beyond the scope of individual assistance and action . The millions of dollars raised might be nothing

against the billions needed, but, it is 35 argued, $100 million saves a lot of lives . The standard response to this - that there is no point in saving lives this year, merely for people to die twelve months later - remains unconvincing even if it is technically correct . And indeed if that was all Consumer Aid was about, the shortterm saving of lives, there would be little argument with it . But its very success, the hype and hard-sell that has surrounded it, makes it something much more than this . It has had enormous implications for the way people perceive Africa and, more generally, the Third World . Consumer Aid is about a product, a packaged disaster, and a client, the individual consumer . The problems and answers of the Third World are only marginally about those things . Central to the whole of Geldof's campaign was the idea of a sudden disaster and immediate action . This was reflected in the style of presentation, particularly of Bob Geldof himself . There was the frequent emphasis on the word `now' and a very visual sense of urgency and crisis in the interviews and appeals . Even Geldof's idiosyncratic personal style and use of the English language were used effectively to create a sense of immediate crisis . The message put forward was that this was something unusual and required unusual people and unusual measures . In an irony that Geldof seems to have missed, his approach has been beautifully summarised by the copywriters for Polaroid . In large and presumably lucrative adverts, Geldof smiles coyly out from a Polaroid photograph . `Why Waste Time' shouts the headline, `The Polaroid 600 series lets you go anywhere, do anything, get results . . . If you can't be spontaneous, forget it', for this, they claim, is the `Technology for Rebels' . It is Polaroid who come nearer to understanding the nature of Geldof's `rebellion' than Jacques

Capital & Class

36 or Hall . Mistakenly, people felt that Band Aid and Live Aid succeeded despite Geldof's style . In fact, it was crucial to it . Here was the ultimate rock entrepreneur walking over the slow-moving grey face of government bureaucracy . Governments, it was argued, not only wouldn't help Africa, they couldn't . This was the symbol of an individualised and privatised attack on organised aid, whether it be through the state, through charities, or through the international agencies . Indeed, in its early stages, and certainly in the public eye, it was an attack on `organisation' . Africa, then, was a human disaster of massive proportions which no one was doing anything about . The BBC had 'discovered' it and Geldof was going to `solve' it . The drought had in fact been in progress since 1983 . As Lloyd Timberlake points out in his excellent study of the environmental factors of Africa's crisis, 3 drought is unlike most disasters in that it can be seen coming, slowly, from a long way off . But drought is not necessarily a disaster . First World countries sometimes experience a lack of rainfall, for example the USA and Australia in 1983 . Yet the results are not `disastrous' . More recently the media briefly featured the drought in the southern states of the USA . It is perhaps ironic that the scale of the disaster was measured in bankruptcies rather than deaths from starvation . As Timberlake points out, there is a difference between being prone to disasters and vulnerable to them . He points out that for famine to follow drought, there are two pre-conditions : a vulnerable agricultural system and misplaced political priorities . As such it is a long-term problem . Famine in Africa is a perpetual threat, malnourishment and hunger a constant problem. The Western public has seen all of this before . They cannot be mobilised

to this continuing crisis, merely to the short-term symptoms . In this Band Aid and Live Aid were no different . Bigger perhaps, and certainly better packaged . In addition, they both manipulated, and were creatures of, the media . For the media, there were famous faces and names, good coverage and good copy . For the participants, there was, cynically, for some the chance to be seen in front of the world's largest ever audience . But for many others there was undoubtedly the feeling that for once, rock might become something less than its normal ephemeral and insubstantial self. Here was a chance to do something . This is a recurrent theme amongst some musicians, that through their music they can have a political impact and Live Aid was to be the ultimate opportunity . In a recent interview, 4 Jimmy Brown of that eponymously political band UB40, speculated about the motivations of those involved in Live Aid . `There they were,' he said, `making themselves feel good for a couple of days - then straight away going back to being involved in all sorts of things which caused the situation in the first place . They didn't become radicals all of a sudden .' And in case it was suggested that this was merely pique at not being invited to take part in Live Aid themselves, one of the other members of the band suggested that this applies to all aspects of political pop music - Red Wedge and Rock Against Racism included : `they're naive to imagine that pop music can affect people's political opinions .' Brown seems to have best summarised it when he commented that `Pop music has no depth and no power whatsoever - it's like canned food .' The last two years of Band Aid and its associated offspring have been a passing fad - unlikely to be repeated . The problems of the Third World, however, look likely to carry on into the next decade .

Geldof aid Indeed, for some it is much worse than this . As early as 1978, Edem Kodjo, a former Secretary-General of the Organisation of African Unity, argued that `Africa is dying . . . All other things being equal, absolute poverty, instead of declining, is likely to gain ground . It is clear that the economy of our continent is lying in ruins .' Africa, then, is in an escalating crisis . For that reason, it is tempting to reduce Geldof to a very minor character in the story and forget him . Yet he and Africa remain crucially linked in at least one respect . The culture of the consumer is not about reality, but image . So, whilst Geldof's impact on famine itself may be relatively limited and short-term, his efforts may have hampered considerably the ability of others to change things in the future by whatever means . The image of Africa and the African has not been opened up, but is even more entrenched in notions of poverty and backwardness, which are now more closely linked than ever to ideas of famine and aid . Ethiopia has become the stereotype, not only of Africa, but of much of the Third World . In itself, this would only mean that we have progressed very little . But in another sense, we have gone backwards . For when famine returns, as it is already doing, the way will be opened for a public perception which has Africans responsible for both the problem and the solution . The con-

sumer is unlikely to take lightly the 37 `wasting' of the seemingly large sum of $100 million . More importantly, they will surely respond negatively to the failure of such a self-evidently superior product . The explanations are likely to be sought in the inefficiency, incompetence and violence of the African . At a time when Western governments are promoting the view that it is the power of marketplace that will resolve the crisis in Africa, the inability of the continent to make use of such a magnificent gesture as Band Aid and Live Aid will reinforce the pressures that already exist to reduce support for the Third World . The highly personal involvement of people in Consumer Aid, which Jacques and Hall so admired, will then be turned against both the producer and the recipient . In the end people will be no wiser about the problems of Africa, and much less interested in what is being done to resolve them .

Notes 1 . Jacques, M . & Hall, S . (1986) `People Aid : A New Politics Sweeps the Land', Marxism Today, 31(7), July . 2 . `Growth First, Food Later', Guardian, 3/ 6/1986 . 3 . Timberlake, L . (1985) Africa in Crisis . Earthscan . 4 . Observer, 17/8/1986.

M

3 Joseph Hanlon Sanctions

s MU 38

Ca

The move towards sanctions against South Africa may be glacially slow, but there clearly is now movement . Joseph Hanlon suggests that it is time to look more closely at the goals of sanctions, as well as at the key role to be played by TNC5 . RHODESIA IS sometimes cited as the classic example that sanctions do not work . In fact, just the opposite is true - despite British government support for sanctions busting, sanctions did push Ian Smith to Lancaster House, and brought about majority rule sooner than would have occurred without them .' Sanctions were most effective after 1975 ; between 1975 and 1979 per capita GNP fell by 25% . Although black workers were hurt by sanctions, they hit white living standards much harder because goods consumed by whites had a much higher import content . As sanctions bit, the Smith government could not afford to fight a growing war and maintain white lifestyles . And once

Sanctions the whites had less to fight for, they gave up . There are a number of lessons from Rhodesian sanctions, but three stand out with particular relevance to South Africa . First is the centrality of the liberation struggle . Without it, sanctions can be resisted . But sanctions do support the liberation struggle, by playing a key role in reducing the white minority's will and ability to fight. Second is the importance of foreign exchange (forex) . Sanctions do not stop sales to the target . The Rhodesian government and businessmen found that it was possible to buy almost anything on the world market - at a price . But, because of sanctions, they did not have the money to buy . Even with the aid of South Africa, it proved difficult to sell bulk commodities such as tobacco and chrome . Other commodities could only be sold with high commissions, often 25% or more . The post oil-price-rise recession also cut the demand for Rhodesian raw materials and reduced the interest in sanctions busting . (Just as the present recession reduces the demand for South African minerals .) Thus sanctions sharply reduced export earnings while raising the price of imports . No amount of local innovation could make up this shortfall, and the shortage of forex proved a crippling drag on the economy . (Note that this is already happening in South Africa . The apartheid state obtains oil, but according to government estimates it has cost more than US$25 billion over the past decade to break the oil embargo . This, in turn, is more than the short-term debt which caused the 1985 economic crisis . Clearly, sanctions already are working against South Africa .) Third, and often underestimated, is the shortage of skilled people . Rhodesia (as South Africa) did not train local black people and depended on white migration

and TNCS to provide skilled people for 39 economic expansion . Sanctions stopped this, while the war imposed more demands - white men were spending increasing amounts of time in the army instead of on the farm or in the factory, just when they needed to spend more time on the job . There they had to keep running the wornout machinery and the Heath Robinson local innovations that had to be used because sanctions (and lack of forex) blocked the import of new machines . Clearly South Africa is not Rhodesia, and we cannot expect exactly the same things to happen . A total discussion of this would require a book rather than a short article . But it is worth looking at a few important points here . Two factors make South Africa stronger . It is more industrialised and will be able to adapt more to sanctions . And half its exports are accounted for by gold and diamonds, which are particularly hard to stop . But in four other ways the position is similar : a liberation war already underway, a high dependence on imports, bulk exports (like apples and coal) that will be hard to sell in the face of sanctions, and an overstretched white skilled workforce . Finally, there is one reason to think sanctions might work better against South Africa . Rhodesia depended on South Africa for sanctions busting . But who will be South Africa's `South Africa'?

Aims What, then, are the aims of sanctions? The overall goal is immediate majority rule - an internally and internationally accepted handover of power to the black majority, preferably through negotiation . We are trying to speed this process by using sanctions to weaken the economy and thus white resistance - by reducing the benefits of apartheid (thus reducing the desire to

Capital & Class

40 fight), while at the same time weakening the military machine (thus reducing the ability to fight) . And the main instruments are : increasing the cost of imports, reducing the value of exports, and limiting outside supplies of skilled people . Unquestionably it would be most effective to have had comprehensive, mandatory sanctions when they were first called for, more than 25 years ago - or even now . But the political reality seems to be a slow rolling programme . Thus we should stress those sanctions which increase the cost in forex (US$ rather than Rand) to the economy - that impose an `apartheid tax' on imports and exports, or that stop exports altogether . Thus, for example, coal exports to the EEC are critical - coal is South Africa's biggest export after gold and diamonds, the EEC takes 56% of it, and the world coal glut means there are no other markets for South Africa and many alternate suppliers to the EEC . (No wonder the backers of apartheid were so worried about the proposed EEC coal ban .)

TNCS, sanctions and South Africa The second goal of any sanctions/disinvestment 2 campaign should be to force transnational corporations to genuinely withdraw capital and technical support from South Africa . This is, however, much less straightforward than blocking South African exports . TNCS have always played a key role in the South African economy, developing its mines and factories and extracting consistently high profits on the basis of apartheid-organised cheap labour . Indeed, it was the high profit rate that attracted the TNCs and kept them there ; many of the minerals that make South Africa so important exist elsewhere in the world but mines have not been developed .

The TNCS provided both the technology and capital to South Africa, and in large measure still do . Nevertheless, South Africa is a `newly industrialising country' like, say, Brazil. And the TNCS have acted toward it much as they have toward the rest of the Third World . A key aspect was the switch in the 1970s from direct investment to loans, which affected South Africa as well as other developing countries . Indeed, there has been relatively little new long-term capital investment in South Africa for the past decade . Until 1984, aversion to apartheid seems to have played relatively little specific role in this, except for a short period after the Soweto uprising in 1977 . Throughout the Third World, TNCS continue to take out profits, while new capital comes in the form of loans which must be repaid - often in a relatively short time . This has led to a net outflow of capital, in South Africa as elsewhere . For South Africa, then, the two politically sensitive markers are new loans and reinvestment of profits . Politics affect the nature of loans to South Africa - when there is relative calm, interest rates fall and repayment times can be extended . In 1983, for example, Swiss bankers increased interest rates and shortened terms ; this was reversed in early 1984 with the approval of the new constitution and the signing of the Nkomati pact with Mozambique, when five-year loans were granted at relatively low interest rates ; in late 1984 after the townships exploded, this was reversed again . There have been some examples of firms genuinely withdrawing from South Africa, especially during the brief period when exchange controls were lifted . Since the 1984 debt crisis, capital can only be taken out at the `financial rand' rate, which is about half the normal `commercial rand' . This makes divestment/disengagement



Sanctions relatively unattractive . This political judgement by inter- 41 Profits, however, can be taken out at national capital is also clear in many of the the commercial rand rate . Yet during examples where firms have claimed to be 1980-83, British companies reinvested withdrawing or reducing their involve58% of the profits of their South African ment in South Africa . What is really associates and subsidiaries, and this re- happening is that TNCs are simply reducmains one of the major sources of capital ing their profile in South Africa . Some, for South Africa . During 1986 the rand like Barclays and Standard, expanded the has been depressed against the US$, and capital base inside South Africa and then in some cases rands will buy more mach- did not take up any of the new shares (for inery or raw materials inside than an which there is a ready market, as the South equivalent amount of US$ will purchase African monopoly groups have surplus abroad . So there is some commercial logic capital) . Sometimes TNCS will sell off a in retaining profits in South Africa . small subsidiary, on condition that the Nevertheless, this is based on a clear new owner signs a long-term contract to political judgement that neither a revolu- distribute their product . But none of this tion nor nationalisation are on the horizon . changes the basic relationship between the Otherwise, companies would be taking out parent and the local partner - the critical profits and even capital at whatever rate outside technical support is still supplied, was available . and profits are generated and reinvested .

RESEARCH IN POLITICAL ECONOMY "These volumes ]the first three as reviewed] are plainly a valuable addition to Marxist echolarship for they tend to contain papers that focus on questions of a most fundamental nature. The first three volumes amply demonstrate the richness of Marxism as a scientific endeavor ." - William Derlty, Jr . Review of Radical Political Economy

"Collections like (Research in Political Economy provide) a forum for the kind of serious radical scholarship so grotesquely absent from most mainstream periodicals in American social science today." - Richard 8 . DuBoff Monthly Review

A SAMPLING OF RECENT ARTICLES The Causes of U .S . Trade Union Decline and Their Future Prospects, by M. Goldfield (Vol. 7) The Politics of Marxist Crisis Theory, by V. Burris (Vol. 7) The Failure of Keynesianism and the Collapse of Bretton Woods, by R . Phillips (Vol . 8) The External Constraint in the Economic Crisis of Eastern Europe, by W . Andreff (Vol. 8) What are Class Analyses?, by S . Resnick and R . Wolf (Vol. 9) Class, Race and Income Distribution : Analyzing 'White South Africa .' by F . Curtis (Vol . 9) Marx, Yugoslavia, and Self-Governing Socialism, by J .E . Elliott and J.V . Scott (Vol. 9) Post-Revolutionary China and the Soviet NEP, by H . Park (Vol . 9)

Submit Articles to : Paul Zarembka, Editor Research in Political Economy Department of Economics O'Brian Hall . North Campus State University of New York Buffalo, NY 14260

The annual volumes began in 1977, also covering many other topics . Order from JAI PRESS 3 Henrican Street London WC2L 81,(% 36 Sherwood Place, P.O . Box 1678 Greenwich, Connecticut 06836-1678

Capital & Class 42

The history of Zimbabwe provides some support for the TNCs' political judgement . Those companies - especially banks and oil and mining TNCs - which stayed in Rhodesia and helped break sanctions are the ones who have done best since independence . They maintained all their property and market shares . ZANU did not reward its friends and punish its enemies - in part because of class interests, and in part because there were too many conflicting demands . Most important, the lack of skilled people (caused by the white community having kept black people out of skilled jobs) forced the new Zimbabwe government to encourage skilled whites to stay and keep industry and marketing in operation . Indeed, outspoken sanctions busters were encouraged to remain and help the new government . The Lancaster House agreement also imposed some constraints on nationalisation . Thus if there is a negotiated handover of power in South Africa, the TNCs have every right to hope that the new constitution will protect them from nationalisation, and that the new government will ask the old managers to stay on to keep the wheels turning .

Tactics with TNCs In the face of the judgement, how are we to force TNCs to not simply lower their profile, but genuinely withdraw technical support and capital? The answer is far from clearcut . If a TNC simply abandons its South African subsidiary, it is giving that asset virtually free to South African capital . Thus a rigid reinvestment ban may make more sense than forced withdrawal . This would force the TNCs to actually withdraw profits (and thus forex) from South Africa . The Pretoria government would probably respond by limiting repatriation of profits . If reinvestment were

banned, this in turn would force the TNCS to increase transfer pricing and other techniques to bring out money . Thus this is a possible argument for allowing TNCs to continue to supply South African agencies and subsidiaries, at least in some cases - so long as reinvestment and technical support are genuinely controlled . Thus allowing TNCS to remain in South Africa, in a severely circumscribed way, would provide the apartheid state with some technical and moral support while draining it of capital ; pulling out ends the political and technical support but also reduces the capital outflow . But if the advocates of sanctions face a dilemma, so the TNCs face a conflict as to what is in their self interest . They need sanctions to put enough pressure on the white establishment to bring it to a Lancaster House type of conference quickly enough to head off a radical revolution, and thus to ensure a constitution with entrenched property rights . At the same time, they need to break sanctions to ensure that their property and market shares are protected, and that they can carry on into the post-apartheid economy . The challenge for those promoting sanctions is how to make the best use of the TNCS' contradiction to solve our dilemma . Notes 1 . See particularly Elizabeth Schmidt, 'Sanctions Fact Sheet : Lessons From Rhodesia', July 1986 . Available from Episcopal Churchpeople for a Free Southern Africa, 339 Lafayette Street, New York 10012 . Also Elizabeth Schmidt, `Sanctions : The Lessons from Rhodesia', Africasia, no . 32 . 2 . In the sanctions jargon, the sale of shares in companies involved in South Africa is called `divestment' in the us and 'disinvestment' in the UK . This is intended to force a company to leave South Africa, which is sometimes called `disengagement' .

Andrew Sayer

New developments in manufacturing : the just-in-time system • THE LAST two decades have seen the emergence of a number of striking innovations in the technical and social character of leading capitalist manufacturing firms . On the technical side there is `information technology' and `systemic automation', including `flexible manufacturing systems' and `computer integrated manufacturing' which some argue underpin a new form of labour process organisation termed 'neo-fordism' (Aglietta, 1979 ; Palloix, 1976) . Yet strangely, the left has paid little attention to some major changes in the social organisation of manufacturing, in particular the 'Just-in-time/Total Quality Control' system of work process organisation developed in Japan . This involves new types of relationships among workers, between workers and management, and between firms and their buyers and suppliers . As has happened repeatedly in the history of capitalism, such managerial innovations have shown practices which formerly appeared to be the acme of capitalist rationality to be wanting . For example, some observers have claimed the significance of the Japanese forms of production organisation to be as great as that of Henry Ford's innovations 60 years ago (Monden, 1981) . And given the effect of the law of value in enforcing the adoption of the most productive techniques among competitors, they are already diffusing outside Japan . Once again in the history of capitalism, innovations in the organisation of production are changing the processes and patterns of uneven development . The point of this paper is to explain these organisational innovations and, by discussing their origins, preconditions and effects, assess how far they can be exported outside Japan and with what implications . Many features of Japanese manufacturing have been cited to explain its competitive success, for example,

Over the last decade an important transformation has taken place in the nature of manufacturing . New forms of production organisation pioneered in Japan are out-performing traditional methods of mass production in the west. In this paper Andrew Sayer shows how the revolutionary 'just-in-time' system turns upside down many western assumptions about manufacturing, and discusses the possibilities and implications of its adoption in the west. According to Sayer the Left has tended to be dismissive of 43 such innovations, and he sets out to show that such an attitude weakens the ability of the Left to respond to the challenge they pose .



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44

relations between industry and the state, between industry and banks, low wages, tame unions, workaholism and the catchall category of `Japanese culture' . While not denying that many of these are important, I want to focus on the circumstances most directly affecting the superior productivity of many Japanese industries, the organisation of the labour process and its supports . I shall begin with some theoretical points regarding the labour process, then show how the Japanese 'just-in-time' system differs from the so-called 'just-in-case' system familiar in the west, go on to discuss their origins and preconditions and finally assess their implications for uneven development and for labour . Approaching the labour process

The Japanese innovations represent a radical departure from conventional western managerial wisdom, yet in common with previous managerial and process innovations they involve the search for time economies in the circulation of capital and for new ways of extracting surplus value . Insofar as this search is part of the nature of capitalism we can apply the abstract theory of capital to any particular capitalist firm, be it American, Japanese or whatever . But in terms of concrete instances of capital, it is important to recognise that the particular organisational forms of capital bear the imprint of the social formations in which they develop : capital is never born by immaculate conception and hence there is no such thing as `normal' capital . Actual capitalist firms are profoundly shaped by the characteristics of labour and product markets, labour organisation, ethnicity and gender, employment legislation, and all of these circumstances and many others affect management-labour relations, management techniques, the organisation of the labour process - even the way technology is used . Particular organisational forms such as Taylorism are not universal stages through which all capitalist enterprises must pass . They are not simple unmediated expressions of the developmental logic of capital but local responses to local and transient contexts . In the case of Taylorism in the USA, the peculiarities of American labour markets at the turn of the century, with their exceptionally high rates of labour turnover (100-300% per year), made deskilling and extreme task specialisation attractive to capital . Similarly, the scope for Fordist organisation and pursuit of economies of scale in mid-century was much greater in the enormous American market than in the much smaller Japanese market . The point becomes clear as soon as we reflect upon western attitudes to Japanese capitalism . Characteristically, westerners bracket it out as a special case, distorted by the peculiarities of `Japanese culture' . But this is thoroughly ethnocentric, for if Japanese capital is shaped by its cultural context, then so too is

New developments in manufacturing

American, British, etc . Once we recognise this, we can ask whether certain characteristics we had previously assumed to be normal or intrinsic to capital as such are really effects of parochial national or regional contexts, and indeed I shall later suggest that an appreciation of the nature of Japanese industry helps us to look at western capital with new eyes . The approach of this paper is most influenced by authors such as Littler and Salaman (1984) and Kelly (1984) . In this, increased managerial control over labour and deskilling are recognised as one among several means to the end of profit, and not as a goal in itself, as Braverman implied (Braverman, 1974) . With the benefit of more empirical research, it has become clear that product technology, labour and product market conditions and state employment policy all affect the type of labour process (Burawoy, 1983 ; Littler, 1982 ; Kelly, 1985) . In contrast to the early labour process literature there is also a more receptive attitude towards the idea of bureaucratic control, towards socalled `cultural' features, such as status-systems and authority relations . Recently, Marxist researchers have come to acknowledge - instead of dismissing - the importance of worker consent and motivation and it is now more widely appreciated that naked coercion is an ineffective way of getting high productivity (Burawoy, 1979) . All of this is consistent with the point that while new forms of labour process organisation are shaped by the general class character of capitalism and driven by the law of value, they bear the imprint of historically- and spatially-specific conjunctures, both in their agencies and diffusion . New forms of production organisation are invariably modifications of pre-existing ones, adapted to suit local contexts . If the new forms permit super-profits to be made they are likely to diffuse outwards to other contexts, as the innovating firms invest in production overseas, or license to competitors, and as other firms imitate them (cf . Littler, 1982) . In particular, multinational firms act not only as `bearers of market forces' (Murray, 1972) or new technologies, but as bearers of new social relations . And it is this diffusion process which has aroused popular interest in cases of Japanese direct investment in the west, such as that of the new Nissan plant in the north-east of England (Garrahan, 1986) . As many have recognised in the Nissan example, the diffusion process is limited by the degree of compatability between the new methods of production and existing practices in the areas in which they are implanted . Inevitably there is a process of mutual adjustment between the two sides . In a rather Darwinian manner, the innovations are either adopted and adapted to the local environment or rejected ; occasionally the resulting mutants turn

45

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out to be more vigorous than their parents . Innovations in the organisation of production: JIT versus JIG It is perhaps easiest to grasp the nature and significance of the Japanese practices if we contrast them with familiar western forms of organisation . I shall do this by setting up a contrast between two extremes - the'just-in-Case' (or JIc) system and the 'Just-in-Time/Total Quality Control' (or JIT) system (Abernathy et al, 1984) . The former is common in America and Europe, the latter emerging in Japan and beginning to diffuse outwards . To a certain extent the descriptions of these systems are idealised, even caricatured, but they are easily recognisable from the business literature . As with many of the most striking innovations in production organisation, JIc and JIT are most evident in mass production but both have some features which can extend to small batch production and perhaps even project production . Needless to say, the two forms of social organisation imply different material arrangements of production equipment, though the differences in hardware between the two systems is not dramatic . The `Just-in-case' system Many of the characteristics of the JIc system will already be familiar but I shall try to describe them critically as particular ways of organising industrial capital, rather than as the only possible face of `normal' industrial capital, at a particular stage of development . The 'Just-in-case' system is a shorthand for a common bundle of characteristics of western industrial capital . These include particular approaches towards volume and specialisation of production, flexibility and demarcation, skills, quality control, bureaucratisation of procedures and relationships between groups, management techniques, innovation and the labour market . This is a diverse range of aspects, but they have a certain unity . In many respects JIc resembles 'Fordism', but for reasons which I shall explain later I prefer not to use this term . Unless limited by restricted markets, we have come to expect modern capitalist manufacturing firms to go for high volume production of standardised commodities, and to compete by pursuing economies of scale and speeding up the production process . High volume is seen by management as the route towards lower costs per unit, and at the pre-assembly stage, long production runs of components are similarly striven for in order to minimise downtime of machinery . Even in small batch production, runs may be long in relation to orders of a particular product at a given time, in anticipation of future orders . In other words, if

New developments in manufacturing a machine takes six hours to set up for producing a particular component specification it seems rational to maximise runs so as to minimise the proportion of dead time spent re-setting the machine, rather than re-set the machine repeatedly for short runs . The kind of machinery and organisation adopted therefore tends to be rigid since it is `dedicated' to executing a single operation repeatedly . Under this system, nothing must break the continuity of production and the imperatives of the system are summed up in the phrase used in American manufacturing 'getting metal out the door' (Abernathy et al, 1983 ; Business Week, 14 .5 .84) . The long runs in turn entail large inventories, and ample 'in-process inventories' or `buffer stocks' are maintained so that should any stage of production be disrupted, or should any component be defective, the rest of the system can continue to function while the problems are being attended to . This also applies to stocks of parts from suppliers ; these again are kept at a level sufficient to insure against supply interruptions . In similar fashion, a reserve stock of labour may also be hired to prevent absences causing interruptions to production too ; hence the 'just-in-case' tag . The rigidity of the hardware of the system matches the rigidity of the social organisation of production which has come to be associated with it, indeed there has almost certainly been a process of mutual adjustment between the technical and social sides through the responses of management and labour . Several features of this system tend to encourage demarcation : the specialisation of particular parts of the factory for particular operations ; the emphasis upon long production runs ; the movement of parts on a conveyor between specialist workers instead of the movement of workers between several activities ; the separation of tasks and workers by large buffer stocks - all of these insulate different groups of workers from one another and reinforce the inflexibility of the system . Yet the size of the plants enables workers to offset this fragmentation and build up a strong labour organisation . Despite the presence of buffers to protect against disruption, the extreme specialisation and demarcation of work make the whole plant vulnerable to stoppage by the withdrawal of labour from just one small part . Typically, suppliers are chosen primarily on the basis of price competitiveness and key inputs are sourced from more than one supplier to protect against possible disruption . Quality of goods supplied from other firms is checked by sample tests to ensure that reject levels do not rise beyond a certain percentage of deliveries . The suppliers themselves use lic methods and deliver in large but infrequent batches to their customers' warehouses . Both functionally and geographically the relationship between

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firms and their suppliers tends to be distant ; how the suppliers operate is of no concern to the purchaser, provided the price is right, and this lack of inter-firm contact together with the infrequent nature of deliveries allows suppliers to locate at often considerable distances away from the purchaser, if by doing so they can minimise labour costs and other expenses . So familiar are many of these characteristics that it might seem strange to comment on apparently obvious things like the tendency of suppliers to make bulk deliveries to warehouses . But as we shall see, this is by no means the only way industrial capital need operate, nor a feature of `normal' capital . We are also accustomed to seeing the rationale of the ]ic type of organisation as an ideal realisation of the capitalist logic of time economy, in combining extreme specialisation of tasks, long runs and maximum utilisation of machines, and with its moving lines delivering materials to workers at speeds determined by the management . In practice, however, there are many problems : (i) The system is geared towards uniformity and standardisation of products and is inflexible and unresponsive to changes in the market . This problem increased towards the end of the long boom when the rising optimal scales of Jtc production ran up against the limitations of increasingly saturated markets . (ii) For complex products like cars or TVs it is difficult to balance the various flows of parts and sub-assemblies into the main assembly process without gluts and shortages arising . Myopic concern with speeding up individual machines and individual workers' actions allows the creation of serious imbalances between them . Any introduction of product diversification heightens these problems or requires expensive information systems to monitor processes . (iii) Large inventories and buffer stocks are expensive in terms of interest charges, storage and monitoring costs and wastage when model specifications change (Estall, 1985) . One of the most striking things about factories organised in this way are the large volumes of inactive capital tied up in stocks at any one time which are needed to support a single flow line . On average, it has been estimated that materials or parts are only being worked upon for 5% of the time spent in the factory (Ballance & Sinclair, 1983, p . 148), and that 30% of production costs in industry go on warehousing, inventory carrying and monitoring (Business Week, 14 .5 .85) . Similarly, Miller and Vollman (1985) estimate that overhead costs - including a large element of information transaction costs - make up 35% of total manufacturing costs in the us, though only 26% in Japan . (iv) Rejects and other problems tend to be concealed in buffer stocks . The possibility of using another part from the

New developments in manufacturing buffer stock instead of the defective one and the imperative of keeping the line moving lowers the priority given to dealing with the source of the problem, as does the use of rectification lines . Also the time lapse and the physical distance between the discovery of the reject and its source conceals the origin of the fault . Often the problem will originate in a part from a supplier . (v) `Testing quality in' is far more expensive than building it in first time . The former allows significant quantities of labour and materials to be squandered on producing rejects and then on identifying and rectifying problems . Quality control departments are therefore non-productive ; their very existence is an acknowledgement of waste and an excuse for not ensuring that work is done right first time . (vi) Distant and non-interventionist relations with suppliers have their disadvantages : large, infrequent deliveries imply heavy warehousing and related costs, as explained in (iii) above ; permissive attitudes to suppliers' quality control allows costs to be incurred as described in (iv) and (v), and the 'arms'-length' relationship fails to encourage other kinds of harmonisation between supplier and customer, for example in the design of components . (vii) The jIc system requires a deep vertical hierarchy of control to coordinate different tasks, given that each worker generally only knows anything about a single specialised, and often deskilled, job . This in turn is both cause and effect of numerous but rigid demarcation lines, highly complex pay structures and an overweight bureaucracy . It is also tempting to suggest that these features encourage and are reinforced by multi-unionism as a form of labour organisation, as they appear to be in Britain, though it is also found in countries where single unionism is common, such as West Germany . 2 Further, attempting to push specialisation to the extreme, eliminating all overlap in activities or competition between internal divisions - sometimes termed 'hyper-rationality' - has frequently been found to be false economy as it encourages empire-building, poor coordination between activities, inflexibility and a lack of competitive stimulus (Peters & Waterman, 1982 ; Aoki, 1985) . (viii) Restricting workers to single tasks under-uses their abilities, reduces motivation, increases boredom and hence fatigue, absenteeism, `soldiering' and resistance . (This is not to imply that flexibility is necessarily wonderful!) lic suffers from many of the deficiencies of Taylorism : rapid turnover of labour encourages deskilling and management's withdrawal of trust and responsibility from labour tends to generate behaviour which justifies such policies . Separating workers by buffer stocks conceals interdependencies between workers, reducing feedback

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and cooperation between them . (Again, production workers needn't worry about quality if that's the job of a separate department .) Flexibility in restructuring is also inhibited by demarcation because it freezes a particular technical division of labour and makes it difficult for capital to reduce the number of workers on particular jobs or to re-design and reallocate jobs . (ix) Finally, `getting metal out the door', coupled with the priority of quantity over quality inhibits process development, thereby foregoing possible economies . As a result of these problems, it is common for the line to go down for long periods and despite the apparent hyper-rationality of the system, considerable wastage is almost inevitable . For example, in 1979 at British Leyland's plant at Longbridge, the tracks only worked for 65% of the time due to hold-ups for materials and breakdowns (Guardian, 15 .6 .84 ; and see also Shaiken, 1984) . In summary then, despite the 'flow-line' tag which has frequently been applied to the Jtc system, it has been found to be far from fluid, but thoroughly rigid and mechanical . In the extreme case of Henry Ford's sytem, only the final assembly line approached anything like a continuous flow : for example right-hand door panels would be stamped in runs of half a million and stored until needed! (Cusumano, 1985, p . 270) Contrary to the literature on 'neo-fordism', the resulting problems of extreme rigidity and massive inventories surfaced not in the 1960s and '70s, but in the late '20s when Ford was overtaken by General Motors . GM used smaller lot production in body stamping and final assembly, designed machinery to be adaptable for new models and relied more on product innovation and differentiation in their market strategy ('keeping the customer dissatisfied') . GM could therefore restructure far more quickly than Ford ; while Ford had to change from extreme Fordism, it never caught up again (Hounshell, 1984) . (Unfortunately, a fixation with Ford's methods and a pervasive blindness to the role of product innovation in capitalist competition has allowed this development to escape the notice of most radical analyses of capitalist manufacturing (Sayer, 1985a) .) Yet while GM's methods were more flexible than Ford's, by modern standards they are still rigid and until recently GM has been widely regarded as a classic example of the JiC system . Appreciation of its problems increased in the late '70s, when, after a decade of falling productivity growth in the west, the export performance and extraordinarily rapid growth of Japanese manufacturers, particularly in cars and consumer electronics, began to arouse interest in the west . Initial accusations of `dumping' held little water, and it was found that Japanese car

New developments in manufacturing firms had a $1,900 cost advantage per car over American firms in the early eighties . The Japanese firms had markedly higher productivity and were more flexible in responding to market opportunities and more innovative in product design . Most extraordinary of all was the realisation that the higher productivity was in general not due to greater and more sophisticated equipment, indeed Japanese workers were often using smaller amounts of machinery and less sophisticated technology than their American counterparts . In addition to well-publicised features of Japanese manufacturing, such as quality circles and lifetime employment, some startling features emerged such as the practice of assembling completely different models on the same line . Gradually, it became clear that what was involved was not simply a few `cultural peculiarities' but an innovative and highly integrated system of production organisation . The `Just-in-time' system The 'Just-in-Time/Total Quality Control' system, like the system, is a shorthand for a group of related practices . It emerged in the post-war period through the attempts of some Japanese car manufacturers - particularly Toyota - to adapt western practices to Japanese conditions . Strictly speaking, 'JIT' refers narrowly to a way of organising the immediate manufacturing labour process and buyer-supplier relationships between firms, but it is normally surrounded and supported by a wider set of practices regarding skills, management-labour relations and labour market conditions . I shall discuss these supporting practices later . The following account is based primarily on Monden (1983), Schonberger (1982) and Suzaki (1985) . Under the JIT system, reduction of set-up times of machines is a key target . Its achievement is greatly assisted by the close relationship common in Japan between management, process engineers and shopfloor workers . Sometimes firms will use several small, simple machines rather than one large and highly sophisticated one in order to give more flexibility . While CNC machines and the like can reduce set-up times, often quite low tech, non-computerised modifications will do the job too (Schonberger, 1982) . For example, Toyota cut set-up times for a press from 1 hour to 12 minutes, while the equivalent time in the us was 6 hours . Faster set-up times partly offset the economies of long production runs and reduce buffers or work-in-progress inventories, although of course it is still advantageous to produce as much as the market will allow . Buffers are regarded as evidence of waste - wasted labour (in producing more than is needed at a given time), waste through JIC

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imbalance between workers and between processes, production problems, `idle time, surplus workers, excessive equipment capacity and insufficient preventive [sic) maintenance' (Sugimori et al, 1977) . Therefore other key targets of management are the progressive reduction of buffer stocks towards zero and the elimination of errors and rejects in each task . In fact these targets are related . The smaller the buffer, the more sensitive the system is to error, and hence the greater the visibility of the source of the error and the greater the incentive to remedy it and prevent it happening again . `Total quality control' is therefore essential . Conversely, the more quality is `built in', the less the need for buffers and the greater the responsiveness of the system . To this end, machines are designed to stop automatically as soon as a defective part is produced or to reject any defective part that is fed into them - a practice known as 'autonomation' . To be most effective, this process of error elimination requires management and process engineers to be highly knowledgeable about the details of the work process, to keep work under close surveillance, and to be able to elicit the workers' own knowledge of the process in order to improve it . Managers and supervisors also need to give individual workers rapid and clear feedback on their performance and to train them to get quality right before going for quantity . Accordingly, setting up a new production facility is often not seen as a matter of getting a standardised line set up as quickly as possible and then `chasing volume' . Rather it is a matter of building it up slowly, making piecemeal improvements in the process over a period of, say, 5 years . The skills of the workers, particularly behavioural skills of cooperativeness and self-discipline, have also to be developed as part and parcel of this process, and this has the effect of making the firm less mobile in its investments than Jic firms where workers are seen as standard, substitutable, low-skilled inputs into fairly standard production set-ups . Obviously, this needs a more cooperative and involved workforce than is expected in the Jic system, and one which is flexible . Workers are expected to do their own regular preventative maintenance and take some responsibility for remedial action themselves should a problem arise . 'Autonomation' also increases the intensity of work because it means that machines do not have to be minded ; having set one machine in motion, the worker has to move onto another rather than wait for the first to finish . Where appropriate, workers are trained to switch between jobs as and where needed, under their own discretion, helping fellow workers who are overloaded . Alternatively, workers may carry out a fixed cycle of different operations : Suzaki reports the case

New developments in manufacturing of a Toyota worker who handled 35 different production processes in a cycle lasting 8 minutes and 26 seconds (plus or minus 2 seconds) and who walked 6 miles a day in the process! An additional advantage to capital of this movement between tasks is that it exposes those jobs which do not need one worker's undivided attention, thereby highlighting further room for economies . The reduction of buffers therefore not only reduces inactive capital but stimulates a continual learning process, indeed ideally the production process never becomes entirely standardised and the `learning curve economies' continue long after the learning curves of orthodox firms have levelled out . It is for these reasons that JIT is not simply a low-inventory system of production as some commentators have implied (e .g . Estall, 1985) . It is a particular and sophisticated method of learning-by-doing . And this is a primary reason why Japanese firms have had so much success in out-competing established western firms which had treated their industries as mature and for which relocation to cheap labour countries was seen as the only way of improving competitiveness . Hence, when the `learning curves' of western firms in consumer electronics, air conditioners, cars and office machinery had flattened out, those of the Japanese continued to improve (Abernathy et al, 1984 ; Rosenbloom & Abernathy, 1982) . (However, it remains to be seen whether the Japanese or other firms can gain still further economies by using such methods with cheaper labour overseas .) The most startling feature of the whole system is the one which gives rise to the 'Just-in-Time' label . Instead of producing at maximum volume in long runs in anticipation of demand, the essence of the JIT system is that work is only done when needed, in the necessary quantity at the necessary time . Buffers are very small and are only added in order to replace parts removed downstream . Workers at the end of the line are given output instructions and they instruct the workers immediately upstream to produce the parts they will need just-in-time, and these latter workers in turn instruct workers upstream of them to produce just-in-time, and so on . Sometimes the instructions are communicated by means of tags or boards called 'kanban' (hence the 'kanban system') which are passed to the worker upstream when required . In other words, it is a `pull' rather than a `push' system . By this simple method the kanban system orchestrates diverse activities into a flow line, markedly reduces planning, information-handling and supervision costs and increases the utilisation of capital (Ohno, 1982) . According to Suzaki (1985), Japanese car firms only require a fifth of the indirect workers needed by us firms .

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Kanban also does this more cheaply and effectively than expensive computerised production control systems known as `Materials Requirement Planning' (MRP) systems . The latter need workers to update information continually, and since they operate on a `push' basis, they are liable to cause pile-ups when something goes wrong . (However, MRP can cope with larger output variations than kanban and it is the former which Nissan uses most .) The kinds of machinery used need not be very different from those used in the Jic system ; as we saw, often quite low-tech modifications - rather than microprocessors and robots - can dramatically reduce set-up times and increase the flexibility of machinery . But the layout of the factory has to be changed radically : For example, (under the Jic system) lathes are clustered in the factory and operated by workers specialising in such skills . This contrasts with a layout oriented to production flow, where eqipment is in line with material flow - the common approach in Japan (Suzaki, 1985, p . 14) . Consequently, parts and materials do not need to be stored in batches and moved by expensive fork-lift trucks or whatever but can be moved by simple chutes or trolleys . Where advanced automation, such as flexible manufacturing systems, is introduced, its effects on productivity are greatest where it is applied to a production system that has already been rationally organised ; otherwise it is likely to perpetuate the inefficiencies of the old technology and working practices, as has been found with many major new technologies, including computer-integrated manufacturing and office automation (Riley, 1985 ; Sayer, 1985a) . The JIT system, and more generally the involvement of managers, process engineers and workers in continual work study, suggest that the ground will be particularly well-prepared in leading Japanese firms . In this light, it is interesting to note that Japan is the only OECD country to have sustained an increase in (so-called) capital productivity over the past decade (Freeman & Soete, 1985) . 3 As might be expected, these characteristics require that orders to the firms' suppliers and subcontractors are small and frequent, indeed deliveries may be made several times a day and hence proximity to suppliers is essential . The most extreme example of such a localised complex multi-layered production system is Toyota City, on the edge of Nagoya, where almost all of Toyota's 3 million vehicles are made (Sheard, 1983) . In other words, capital can get most benefit from the JIT system when suppliers (and, in turn, their suppliers) also adopt it . This makes for reductions in expensive materials handling equipment and in

New developments in manufacturing

factory space, for little room is needed for stocks, as deliveries are made close to the point at which the inputs are to be used . Also, it drastically reduces the labour needed to book in supplies, to store and keep track of them, to authorise their release from the warehouse and to move them to their place of use . Indeed at the extreme, the warehouse should not be needed . Now earlier we noted the practice of processing different models on the same production line and in a mixed sequence rather than in homogeneous batches . Whereas this would be a nuisance under the JIG system it is a necessity under JIT . To illustrate, let us assume that there are just three different models, A, B and C . If a firm using JIT were to make As in the morning, Bs in the afternoon and Cs in the evening, it would have disruptive consequences for suppliers, (given just-in-time deliveries) since, for example, a supplier of parts for model A would get an irregular work pattern which would make for inefficiency . If however, the main firm mixes its sequencing of models as much as possible within the constraints of demand patterns for different models and the time required for different operations, there will be less of a tendency for output irregularities to get amplified upstream . Suppliers will therefore be faced with a smoother demand schedule and output of different models will always match the pattern of final demand rather than being dictated by a need to produce in large, homogeneous batches . If workers upstream of final assembly are to be fully and continuously occupied then it is important that not only the sequence of different models but the level of hourly and daily output be as constant as possible. So a `smoothed' output is both a condition and an effect of deployment of workers on fixed cycles of tasks, otherwise the rule that workers must not do anything until instructed to do so from downstream would result in enforced periods of zero productivity! In other words, while JIT is a `pull' system, a highly irregular and unpredictable sequence of `pulls' from final assembly would lead to inefficient use of labour and machinery upstream . Therefore although minor fluctuations in volume can be dealt with at short notice (plus or minus 10%), output has to be smooth enough, and production planning accurate enough, to enable the number of workers and the size of work-in-progress inventories to be minimised without risking hold-ups (Aggarwal, 1985 ; Hall, 1982 ; Monden, 1981 and 1983 ; Sugimori et al, 1977) . So while JIT is more fluid than JIC, it has its own kinds of rigidity in terms of repetition of standardised cycles of tasks . Japanese manufacturers tend to make greater (and increasing) use of subcontractors than their western counterparts and major companies usually draw upon several `layers' of sub-

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contractors, which act as shock absorbers for demand fluctuations (cf . Aoki, 1985 ; Ikeda, 1979 ; Sheard, 1983) . Subcontractor firms may also use JIT and total quality control so that it extends across a system of linked plants . In this respect the same principles operate between firms under the two systems as operate within them . Relationships between buyer and supplier firms are accordingly much closer than is usual in the west, with the main buyer firms exercising considerable influence over not merely pricing but over product development and the day-to-day internal functioning of the supplier in order to ensure security of quality and supply . Sometimes one firm may `lend' some of its workers and managers to another firm with which it works . In other words, where the JIc system relies upon large stocks to provide security of supply and competitive and sometimes multiple sourcing the JIT system relies upon close management surveillance, cooperation and overlapping ownership . This system is said to combine the organisational advantages of vertical integration without the financial obligations (Altshuler et al, 1984, p . 147) . Foreign visitors to Japan rarely see the smaller firms which do subcontract work for the major companies and many accounts of the Japanese industrial phenomenon ignore them . Attention has rightly been drawn to the differences in pay and conditions between the two sectors . Lifetime employment is absent in the subcontract sector and the lower the `layer' of subcontract work, the greater the proportion of female workers and the lower the pay, indeed pay in this sector may be up to 40% lower than in the major firms (Guardian, 11 .5 .82) . This is obviously to the advantage of the large firms ; for example components purchased by Nissan have been estimated to be 30% cheaper than those bought by British Leyland and Ford (Sunday Times, 23 .5 .82) . Some observers have attributed Japanese industry's success to this hidden pool of cheap labour, but while it obviously must contribute to its competitive position, it does not account for the advantage of markedly higher output per worker that Japanese firms frequently have over their overseas rivals . To summarise then, whereas the jic system is a method of mass production based on a collection of large lot production processes separated by large buffers and feeding into a final assembly line, JIT is a system of mass production consisting of a highly integrated series of small lot production processes . Further, JIT is a learning system which generates economies by making fabrication and assembly more closely approximate a continuous flow line, by reducing the amounts of machinery, materials or labour power which are at any time inactive or not contributing to the production of saleable (i .e . adequate quality) output . So in

New developments in manufacturing this case, economies do not follow simply from major technological developments, nor from simple speed-up of individual tasks, though that is likely to occur too, but from a different way of organising the labour process, coupled with piecemeal changes to machinery . As we have seen, the nature of management-labour relations is crucial : it is a specific set of material social practices and relations, and not reducible to `Japanese culture', though that surely has some effect . As a system of mass production, JIT can only be used by a minority of manufacturers, for contrary to the impression given in much of the Marxist literature, most manufacturing employment is in small batch and project production . 4 However, JIT depends on a set of conditions which are much more pervasive and can be applied to a variety of types of labour process . These conditions include multiskilling, flexible working and job rotation, plus simple payment systems to facilitate this, low turnover of managers and key workers, close involvement of managers and process engineers on the shopfloor, zero defect or total quality control, quality circles (not only for reducing waste due to defects but for securing active involvement and for rationalising the labour process), and close collaborative relations with suppliers . Obviously some of these conditions already exist outside Japan . While JIT is unlikely to work without these conditions the converse does not apply. Firms may make significant economies by achieving these conditions and given their complimentary character the gains to capital will be greatest where they are introduced together ; for example, progress towards getting active consent and flexible working will be impeded if there is a lack of job security and complicated payment systems based on a rate for each job . Aggarwal (1985) claims that Japanese firms which have used JIT for 5 years report a 30% increase in productivity, a 60% reduction in inventories, a 90% improvement in quality rejection rates and a 15% reduction in floorspace use . These then are some of the ingredients of Japanese superiority in high volume, high quality manufacturing . While I have stuck to the material organisation of production I don't wish to deny that culture has any effect . Nevertheless, there are some common dangers in explanations which stress this : (1) `culture' can easily become a `dustbin category' for anything we can't explain ; (2) culture is often misrepresented as something ethereal and eternal, divorced from historical material practice ; or (3) as a self-perpetuating tradition, determining contemporary actions . I am not qualified to make specific claims on just how cultural practices affect production, but I would insist - against (2) - that those who make such claims demonstrate exactly how cultural characteristics translate into high productivity, for this depends

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not just on individual qualities or even on types of authority relations, but on specific forms of material social organisation which make these qualities yield economic results . Finally, some comments are in order on the nature of 'flexibility' in the JIT system, for there has been a great deal of `hype' about `flexible manufacturing' in the press and recently the term has been used in a rather cavalier way on the left, as, for example, in Piore and Sabel's 'exagger-book' The Second Industrial Divide (1984), where flexible manufacturing is seen as a successor to mass production . Here it is important to distinguish between flexibility as regards (1) the characteristics of labour, (2) as regards the ability of a specific labour process to cope with a variety of products and variation in output levels, and (3) as regards restructuring . Further in discussing Japanese manufacturing we must distinguish between JIT in the narrow sense and the wider set of supporting conditions . In sense (1), JIT undoubtedly requires more flexible workers than jic, though for long periods of time they have to be flexible across a fixed range of tasks . In sense (2) . JIT could be used either for a single product or for a range of different models . However, although this could be considered as a kind of flexibility, it is again flexibility within a set product range ; the JIT system in the narrow sense cannot tolerate frequent design changes in the range of models being produced (Aggarwal, 1985) . Although Japanese manufacturers make heavy use of overtime and suppliers to respond to fluctuations in demand, as we have seen JIT cannot tolerate wide fluctuations in output . So where does the Japanese reputation for rapid restructuring and flexible market response come from (sense (3) )? The answer almost certainly lies in the features of Japanese industry surrounding the labour process . These include rotation of personnel between departments, extensive training and lack of demarcation which make for better coordination in restructuring, plus longer term planning than is common in the west . A further factor is the access to cheap long-term credit and long-term profit criteria which enable Japanese firms to continue investing during slumps . This latter advantage has been particularly important in enabling Japanese semiconductor firms to take leadership in the production of memory chips away from the us, where firms have fallen behind in the technological race through having to cut back on R&D every time there has been a slump in revenue . In other words, there are several kinds of flexibility to consider : with respect to labour ; fluctuations in overall demand ; regarding changes within a given range of models; and in restructuring, i .e . introducing completely new products and process

New developments in manufacturing 59

technology . As regards the latter, Japanese firms have the advantage of being able to insulate themselves to a certain extent from the unwelcome `flexibility' of the economic cycle! An important factor in the development of Japanese manufacturing methods was the extent to which it escaped the influence of Taylorism . In practice, as opposed to the textbook version, Taylorism can be broken down into separable elements and it was chiefly its emphasis on work study, which made a lasting impact on Japanese manufacturing . Littler argues that deskilling and specialisation were limited because, unlike Europe and the us, the work groups ('oyakata') used in early forms of labour process organisation based on contracting proved resistant to fragmentation and were generally incorporated rather than broken up by employers . This, together with the prevalence of family ties within and between firms made group working and intercompany collaboration more congenial than in the west . Nevertheless, after the second world war other aspects of western methods were widely imitated, under the encouragement of the Japanese Productivity Centre (Cole, 1971, p . 55) ; an example of this - in retrospect ironic - was Nissan's licensing from Austin of Britain to learn advanced production techniques in the '50s (Haruo, 1981) . Quality circles were another import from the us, introduced by American business advisors during the occupation ; in this case, the Japanese took them more seriously than their American counterparts and in the long run the adapted version proved more successful than the original . Early forms of JIT, or the `supermarket principle' had been tried out in the us before the war in the aircraft industry, though with little success . Moreover, the methods used by the Japanese for making machinery more flexible were not unknown to American manufacturers, but the latter ignored them . In Japan, JIT and its supporting conditions emerged as a way of making a virtue out of necessity . The tiny size of the Japanese domestic market after the war ruled out the pursuit of economies of scale on jic lines . For example, an entire year's output of the Japanese car industry equalled only one and a half days' of the American industry, and expensive resources and limited space made a low-waste, lowstock system imperative . Taiichi Ohno, the Toyota production engineer most responsible for the development of JIT, began limited experiments in 1948 and gradually extended it through the company, until by the mid-'50s the first suppliers had begun to adopt it (Cusumano, 1985) . By the early '70s, productivity levels had overtaken western levels and the assault on export markets had begun .

Origins 5



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So unlike 'neo-Fordism', Jrr arose neither from the problems of Fordism in the current recession nor from the possibilities offered by microelectronics, but as an attempt to adapt western manufacturing practices to the context of Japanese post-war reconstruction . Yet much of these developments took place in a turbulent context as regards labour organisation ; the history was certainly not simply one of a management learning process, imposed on a compliant workforce . In the late '40s and early '50s, Japanese trade unions were under strong left-wing control and posed a serious threat to the redevelopment of Japanese capitalism . There was a series of strikes throughout the period, culminating in the historically-decisive Nissan strike and lockout in 1953 . Among the issues in these strikes were resistance to the new methods being introduced at Toyota and demands for greater security of employment and a reduction in pay differentials . Resistance at Toyota was quelled rather more easily than elsewhere, largely thanks to its location in a rural area where workers had no previous experience of industrialisation and no alternative sources of work . Nissan, by contrast, had factories dispersed throughout the Tokyo-Yokohama conurbation and a more militant workforce . What most alarmed the capitalist class was the prospect of an organisational innovation of a rather different kind - the attempt by Nissan trade unionists to introduce westernstyle shopfloor committees . While there is much more to the story, it is worth nothing that lifetime employment was among the concessions made by Nissan in order to buy-off key workers : it was not some eternal cultural characteristic . And it was the breaking of this 1953 strike in particular which paved the way for the right-wing displacement of the industrial unions by supine company unions which avidly collaborated in management initiatives . Meanwhile, having weathered the storm (and without needing to make so many concessions to workers), Toyota pressed on with the development of JIT and slowly other firms began to adopt the system (Cusumano, 1985) . The diffusion of Jrr and its supporting conditions

The uneven development of the social organisation of production is reflected in differences in productivity and profitability between firms in different countries . As new forms of organisation have developed, the leadership in productivity has passed between major capitalist countries . So while it is now common to note the Japanese superiority in productivity over America and Europe, the position was formerly reversed ; according to Ohno (1982), in 1937 it took nine times as many Japanese workers to produce a car as in America! While it is not yet clear how far particular elements of the

New developments in manufacturing Japanese manufacturing system can be detached from the others and yet still yield an advantage, the fact that they are diffusing and being imitated outside Japan, suggests that they are not as firmly rooted in features unique to Japan as many commentators imply . We have already argued that the supporting conditions of JIT are much more pervasive than JIT itself, and indeed features such as flexible working and quality circles have been developing in the west amongst leading firms, indeed firms like IBM and Hewlett-Packard have developed partly similar measures independently of the Japanese . In Britain, while as yet there are probably no mature cases of just-in-time, the supporting conditions are now widely sought after by indigenous and foreign firms alike . Diffusion of JIT by Japanese firms has been slow . One obvious reason for this is that the competitive advantage in Japan derives from unique `cultural' features and favourable relationships with the state and financial institutions . Another derives from the nature of the JIT system itself with its need for close working relationship with, and proximity to, suppliers, and a long period of incubation . While such localised complexes of firms might be set up abroad, this is inevitably more difficult than setting up a single overseas branch plant on JIc lines . This is one of the reasons why the major Japanese firms have been `reluctant multinationals', for particularly in mass-produced goods, as we have seen, they can undercut and outsell overseas producers through exports, even allowing for often high transport costs . Many of the usual gains of foreign direct investment are likely to be offset by losses of the productivity advantages of continuing to operate in Japan . Consequently they have made less use of the `runaway industry' strategy of setting up exportoriented manufacturing plants in Third World countries than have American firms, although the rising value of the yen is beginning to change this . Generally, they have preferred to forego the once-and-for-all advantages of cheap labour locations for the longer-term advantages of developing automated production at home (Sayer, 1985b) . However, even though the difficulty of exporting all the advantageous features available in Japan means that productivity levels are lower abroad than at home, they are still likely to be higher than for local companies overseas . Where Japanese firms have invested in production in other advanced countries the overriding reason has invariably been to preempt protectionism . So far only a few such firms, such as Honda in Marysville, Ohio, have been able to establish anything more than watered-down versions of domestic practices (Fortune,

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15 .6 .81) . This is not only because of unfamiliarity and worker and managerial resistance, though these are important too, but because it takes time to build up a network of local suppliers to provide JIT deliveries . This is especially difficult where, as is often the case, host country supplies cannot match Japanese ones for quality and cost . Without high quality, reliable local suppliers, a strict JIT system cannot be operated, although `total quality control' and piecemeal process improvements can be sought through other means, without the discipline of JIT . Japanese foreign mass-production plants are obliged to compromise between JIT and JIC, both in their relationships with suppliers and with workers . As might be expected, diffusion is also limited by cultural barriers, such as the American resistance to paternalism and close inter-company ties, by union opposition to new forms of contracts and - often underestimated - by management resistance (Holmes, 1985 ; but see Morgan & Sayer, 1984) . There are, however, the beginnings of some local complexes of firms developing JIT methods outside Japan . In north-east England Nissan plans to bring over some of its suppliers to locate near its Washington assembly plant, and similar moves are under way to serve the Honda plant in Ohio - for example Asahi glass (Dan Jones, personal communication) . Schonberger also cites several other examples of this process in the us, particularly related to the Kawasaki plant in Lincoln, Nebraska, which is relatively advanced in its development of just-in-time methods (Schonberger, 1982) . Imitation by western firms is also being widely reported . Obviously, it is true that the recession is both forcing them to restructure and easing the process by weakening labour resistance . Nevertheless the specific form of the reorganisation does seem to owe much to Japanese influences in many cases - as one would expect, given their productivity lead . It is also clear that western firms are combining this social reorganisation with investment in new technology, often with convergent effects on flexibility and inventories . There has of course been considerable `hype' in the business world regarding quality circles, JIT, etc ., and frequently, these are extremely limited or passing fads, because western managers erroneously believe they can simply be `implemented' immediately . But quality circles require lengthy planning and training of workers and supervisors to produce results, and significantly, few Japanese firms in Britain have felt ready to start them yet (Morgan & Sayer, 1984) . Similarly, one suspects that many western managers have interpreted JIT simply as lower inventories, or insisting that normal deliveries are just-on-time rather than late (!), ignoring its wider functions and preconditions . Miller

New developments in manufacturing

and Vollman (1985) report that, as has happened with advanced factory and office automation, many us firms are trying to implement JIT without first rationalising their production processes . Yet both JIT and quality circles have to be tailored to suit individual plants . Clearly we must remember the ambiguity of the injunction `beware of imitations' . Indigenous western firms are also more likely to be hampered by precedent, existing commitments and a lack of greenfield sites compared with Japanese inward investors . For this and reasons already given, imitations are likely to be more diluted . One of the best-known examples of direct imitation is Ford's `After Japan' (AJ) strategy . In 1981, productivity at Ford's Halewood (UK) plant was reported to be half that of Ford at Saarlouis (W . Germany), where in turn, it was reportedly a third that of Toyota's (Financial Times, 28 .2 .83) . 6 Following the AJ strategy, inventories were reduced from a three-week supply to one week . Redundancies of workers in repair and maintenance (one 1 in 5 of European manufacturing workers) were made by training production workers to do simple maintenance and a third of the workforce was organised into quality circles . The hierarchy was squeezed by eliminating two supervisory levels and the number of different grades of workers drastically reduced, for example, from 12 grades of fitter to I or 2 . However, labour resistance has held up the implementation of the AJ strategy in Britain, especially at Halewood where workers have demanded West German levels of pay for matching West German productivity (Financial Times, 13 .11 .85 ; Fortune, 18 .10 .82) . Again in the car industry, the joint-venture of General Motors and Toyota at Fremont, California is also interesting . The old GM plant, which had a history of militancy and rigid demarcation (10-15 maintenance grades alone), was closed in 1982 . The new joint-venture plant, nearby, operates a just-in-time system and some of its suppliers have moved to the area . It has no demarcation within maintenance, just three grades of skilled workers and a single grade for assembly workers . The latter are organised into 5-7 person teams covering a range of jobs and taking a number of responsibilities formerly the preserve of middle managers . To a significant degree, the UAW has had to accept these changes and GM is using the plant as a benchmark against which to compare other plants . However, all 3 us car giants have encountered substantial loyalty to traditional payment systems and resistance to increased flexibility (Fortune, 9 .7 .84 ; Altshuler et al, 1984, pp . 197 & 261) . At another GM complex - Buick at Flint, Michigan, `Flexible Manufacturing Systems and JIT are reported to be combined and

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many of the suppliers are moving onto the "Buick City" industrial park' (Business Week, 14 .5 .84) . However, they are unlikely to go to Toyota City extremes in their localisation of production and to a certain extent JIT has been diluted in order to accommodate supplies within a one-day trucking radius . The nature of GM's relationships with suppliers is also changing with an increase in interventionism and attempts to involve suppliers in design decisions so as to improve coordination (Aggarwal, 1985) . At British Leyland (Austin-Rover), we can also see the effects of both technical and social innovations, coupled with the effects of the recession and the direct influence of the Thatcher government to attack workers' shopfloor power . In 1976, BL had 58 bargaining units for manual workers alone and unions had the right of veto over changes . In a protracted bitter struggle involving victimisation and sacking of activists and isolation of shop stewards, the obstacles to the imposition of new methods were overcome, although the experience can hardly have been conducive to the development of trust and motivation in the workforce . Output per worker per year rose from 5 .9 cars in 1979 to 14 .2 cars in 1983 and employment fell by 30% (Sunday Times, 9 .10 .83) . This was a time of massive redundancies (175,000) in the British motor industry most of which were caused by cutbacks in capacity . Of the remainder, BL management attributed more to flexible working practices and new management-labour relations than to new technology such as computer-aided design and manufacture, `Flexible Manufacturing Systems' and inventory reduction (Financial Times, 9 .4.81 and 28 .3 .84) . For example in the Leyland Bus division, the introduction of greater flexibility at one plant (Workington), led to the closure of two other plants where rigid demarcation remained, in one case with 22 different hourly-paid categories (Financial Times, 9 .1 .84) . Finally, the computer firm Hewlett Packard now has 11 of its 40 manufacturing divisions using JIT, sometimes combined with MRP. Besides reducing waste, these enable HP to produce a more flexible range of products, including a minicomputer that can be made in 6 million variants (Business Week, 14 .5 .84) . Just-in-time purchasing of components is also being introduced and they are now selling a new minicomputer especially designed to control MRP and JIT systems (Computing, 20 .9 .84) .

Industrial location The Just-in-Time system suggests local agglomerations of interunder JIT and JiC acting plants and relative immobility of investment, as we have seen . However, the high degree of localisation of industries in Japan is also influenced by the poor infrastructure for freight movement in the country and the mountainous terrain ; another

New developments in manufacturing example of making a virtue out of necessity (cf . Ikeda, 1979 and Cole, 1971, p . 58) . Where firms change from a jic form of organisation to the JIT system there is some evidence that this may involve a spatial re-centralisation . As Estall notes in the case of the us sunbelt, the decentralisation out of the industrial north-east exacerbated the problems associated with jic organisation . `Supply lines to assembly plants had also become more numerous and lengthier as multi-sourcing developed and components manufacturers sought their own locational advantage from geographical differentials in wage rates and other production costs . Inventories of assembly plant expanded' (Estall, 1985, p . 131) . Estall also reports discussions of the 'recentralisation of the auto industry in the Mid West' (ibid . ; cf. Altshuler et al, 1984, pp . 146-7) . At the international scale the adoption of JIT principles may also prompt a limited amount of 'de-internationalisation', with the policy of using far flung overseas plants being abandoned and the activities being centralised in a few locations . One semiconductor firm found that the 14-day in-transit `loop' of partly processed chips meant that errors introduced in the early stages of fabrication were slow in being detected because of the time lapse before final test . As the reject rate is perhaps the most critical cost factor in the production of integrated circuits, colocating fabrication with assembly offered more rapid feedback on quality defects and lower costs (source : company interview) . Similarly, Apple, the computer firm, assembles its Mackintosh personal computer in a highly automated JIT plant in Fremont, California, instead of shipping components out to Singapore for assembly, which, despite lower labour costs, was expensive on inventories, inflexible, and difficult to coordinate (Business Week, 14 .5 .84) . Other American firms following suit are Motorola and IBM . The latter has adopted a policy of localising suppliers around its main manufacturing plants, though in this case, the company needs to maintain a manufacturing base in its major overseas markets and so this will not entail de-internationalisation (Business Week, 3 .10 .83) . Perhaps the most important countervailing force to recentralisation in the west is the tendency of large agglomerations of related industries to provide labour with a strong base for organisation . The huge concentrations of FIAT workers in Turin are a good example . So looking back at the Japanese `Toyota City' syndrome, it must be said that such agglomerations depend on labour being weakly organised . For these reasons, adoption of the new work practices is most likely in greenfield sites, not merely to escape traditional and militant labour, but to make a fresh start with new management .

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So it is now possible to return to the taken-for-granted characteristics of Jic and its locational patterns and look at them in a new light . The development of highly centralised, global production systems has often been seen purely as a consequence of the expansionary dynamic of capital, rather than as partly a consequence of the historically- and spatially-specific JIc form of organisation . In particular, it is now more clear that large, infrequent deliveries and extensive warehousing were special features of this system which were actually sought after as sources of economies of scale in transport and handling . Yet the JIT system shows that scale effects can be reduced not only within plants but between them in making shipments . However, as many of these examples remind us, such developments are always set within a mass of different, often countervailing forces, and I don't want to give an exaggerated impression of this tendency towards re-centralisation . For example, Toyota has invested in a Canadian plant for making wheels in order to get cheap aluminium ; the wheels are then shipped back to Japan for assembly in familiar fashion (Holmes, 1985, p . 29) . Capital accumulation has never led to a single, universal type of spatial outcome, and there is no reason to believe that future capital accumulation will be any different, though non-random changes will surely be discernible . The effects of JIT and its supports on labour

Given the characteristics of the Just-in-Time system and its supports we can summarise the implications for labour . (Remember that while JIT is unlikely to be feasible without some of these supports, the latter can exist and aid productivity without a full JIT organisation of the labour process .) 1 . As output per worker is likely to increase markedly, the effects on employment in both direct and indirect production are likely to be negative, other things (like demand) being equal . 2 . The reduction of the `porosity of the working day' through elimination of idle time and the requirement of workers to switch continually between jobs, plus the internalisation of disciplinary pressure within work groups or production teams increases the intensity of work and associated stress . 3 . The emphasis on flexibility implies multiskilling and the elimination of demarcation, and reduction or abolition of job descriptions . To facilitate this, if unions are allowed at all, only one union is likely to be recognised . Bureaucratic systems of control give way to more informal, diffuse and paternalistic methods . 4 . Individualised, discretionary merit payments instead of a 'rate-for-the-job', in order to facilitate flexibility . 5 . Workers are given much longer and more diverse on-the-

New developments in manufacturing

job training so as to develop flexibility ; for example, ability to maintain and repair, as well as operate machinery . Yet training in `behavioural skills' is probably more important than technical skills for the worker is expected to exercise much more discretion than under Taylorist methods . Also the JIT system needs a more knowledgeable workforce (including management) to protect it from disruption . Contrary to the fallacy in the early labour process literature that control and knowledge of the production process are a zero-sum game between management and workers, management also has to become more involved on the shopfloor . 6 . The need for long periods of on-the-job training, the greater number of acquired, company-specific skills and the lack of slack in their employment makes it important for firms to minimise labour turnover and make much more use of overtime and the internal labour market than traditional Jic firms, which have high labour turnover and make heavy use of the open external labour market . Fluctuations in demand are met by heavy use of overtime among both primary and secondary workers and of subcontract firms, as `shock absorbers' . While employment in the large firms may be more stable than would traditionally have been the case, the instability of subcontractors, is liable to increase . `Core' workers therefore have more job security than do most manufacturing workers in the west, though this is conditional upon willingness to be redeployed where management deems it necessary . However, lifetime employment applies only to a minority of workers (male only), and is in a sense like a prison sentence because other firms are extremely reluctant to employ anyone who has left such a job . 7 . There is a greater realisation that profitability can depend quite heavily on the performance of workers who are technically unskilled or semi-skilled but behaviourally highly skilled . Unlike traditional firms, the definition of `core workers' with better employment security is widened to include these as well as the usual professionals and technically skilled workers (cf . Morgan & Sayer, 1984) . 8 . The need for low absenteeism and behaviourally skilled `responsible' workers leads to very careful screening of recruits in order to ensure that they will have minimum distractions from the domestic sphere, which, in a patriarchal context means a stronger preference for male workers than under a Jic system . JIT employers are also anxious to avoid recruiting workers or managers who have acquired traditional habits which they would have to unlearn . This and the emphasis on adaptability biases them towards younger workers, often school leavers . 9 . As JIT is a `high trust' system, ways must be found of motivating workers to use their discretion in an acceptable man-

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ner, i .e . not using collective strength against capital . Individualised systems of communication between management and workers - as opposed to using foremen or union representatives as intermediaries - or else company unionism are therefore preferred . Much greater attempts are made to encourage identification with the company in its competitive struggle against other companies and to this end more information on profitability, performance and competition is given to workers (Kamata, 1982 ; Ichiyo, 1984) . Single status employment conditions within firms also help to retain and motivate workers . However, the line between consent and coercion is thinly drawn and it is therefore not surprising that Japanese work practices receive such polarised interpretations according to the political sympathies of the author . On top of this problem is that of explaining the winning of consent in employment conditions as different as those of the primary (large company) and secondary (small company and subcontract) sectors in Japan . 10 . Hierarchies within factories are flattened by the elimination of certain lower and middle management jobs, particularly those involved in supervision, quality control and production planning and regulation . 11 . The formation of work teams or quality circles plays both a cost-reducing and a motivating role, although again, the line between consent and coercion is unclear . In one sense, quality circles represent a reversal of Taylorist orthodoxy : and yet, as Ichiyo (1984, p . 46) observes, they could be said to involve the internalisation of Taylorism by workers themselves in terms of work study and systematic organisation of the labour process . 7 As to whether there is anything potentially progressive in the new practices, I can only give an ambiguous answer . What we have treated as a single organisational form can obviously work in different ways and accordingly workers' reactions to it differ . Not surprisingly, they often prefer flexible working, with accessible management and some involvement in decision-making to demarcation, deskilling and highly bureaucratic organisation . 8 Certainly, there are many qualifications to be made to such judgements, in particular that the granting to workers of some measure of `responsible autonomy' has nothing to do with altruism but is as much a managerial strategy for making profits as Taylorism . Yet this qualification in no way falsifies the workers' attitudes . And it would be no surprise to anyone who has not read Braverman that under the right conditions and with the right methods, management can get more out of workers by giving them more tasks and discretion and by enlisting active consent than by deskilling and relying on coercion . But Japanese management-labour relations can also take

New developments in manufacturing 69

appallingly oppressive forms too, as Kamata, a Japanese journalist found when employed as a contract worker on an assembly line in Toyota (Kamata, 1982) . There are also reports of compulsory participation in quality circles and suggestions schemes (Ichiyo, 1984) and of workers foregoing holidays and working overtime without pay . Circumstances such as these are not simply the effects of management strategy, but must be understood in the context of the balance of class forces, of divisions within the workforce, peer group pressure, company unionism and Japanese concepts of the individual and authority relations . But I would suggest that while Japanese capital may gain from such a situation, the JIT system and its supports are not dependent on them, so that, suitably modified, they can work in contexts with a different balance of class forces, and with different implications for the experience of work . So whether there is anything progressive for labour in the new practices depends on the form they take or the form which labour lets them take . For example, provided that they do not lead to company unions, single union plants have at least the potential to overcome the divisions in the workplace formerly supported by multiple union plants . The old familiar organisational forms certainly do not represent a golden age for labour, even if, at their height, labour was stronger than now . For it has been a highly selective and ambivalent strength, one which actively reproduced divisions in the workforce, particularly between men and women . (See Bannon & Thompson, 1985 ; and especially Cockburn, 1983 .) In any case, trade unions are increasingly obliged to confront the new practices in fixing up agreements with leading firms . In the electronics industry in Britain, unions are finding that in order to get a foothold in new foreign firms they have to accommodate a whole package of conditions which effectively make way for the development of the new management practices . Arguably, the securing of these conditions (flexibility, simplified payment systems, sometimes with an individual merit element, and so on) presents organised labour with a more significant challenge than the much-publicised 'no-strike' clauses (Morgan & Sayer, 1985) .

No doubt I have fallen into the trap of homogenising Japanese (and western!) industry, as Cole (1971) warns, and my account certainly suffers from insufficient knowledge of small subcontracting firms and of the wider Japanese context . (I am also uncertain about how far JIT extends beyond the auto and electronics industries .) From an academic point of view, what is

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needed is nothing less than a major theorised history of Japanese industry, one which links the internal organisation of capital (both big and small) to its wider context . However my primary purpose has not been to give a representative picture of Japanese industry but the more practical one of explaining the rationale of the most advanced forms of production organisation . And since they are now extending beyond Japanese shores, they are evolving in a way which severs their roots in the particularities of the Japanese context . So far, the left has been either ignorant or else dismissive of these organisational innovations, reducing them to quality circles and company songs, but it needs to be better informed if it is to respond effectively . Notes

1. This paper is a short version of my `New Developments in Manufacturing and their Spatial Implications', Urban and Regional Studies Working Paper 49, University of Sussex, 1985 . 2. Obviously, this interaction between the detailed technical and social relations of production has been differently affected by the general economic and political contexts, and these vary markedly between countries and even between regions of the same country . Cf. Morgan & Sayer, 1984 ; Massey, 1984 . 3. Advanced computerised automation such as CAD/CAM has some strikingly similar economic effects to those of JIT, in terms of reduced inventories and faster throughput of capital (Sayer, 1985a) . 4. Kaplinsky estimates that about 75% of manufacturing output is made in batches of less than 100 (1984, p . 131) ; Ballance and Sinclair (1985) estimate that 80% of all manufactures are made in lots of less than 15 units (1983, p . 150) ; while Littler estimates that of Britain's 20 .4m employed, only 1 .4m work in factories concerned with mass production and only about 0 .7m are direct workers on mass production lines (Littler, 1985) . 5. The account of the origins of JIT draws heavily upon Cusumano, 1985 . 6. Nevertheless, as Cusumano shows, such figures exaggerate the Japanese productivity lead . 7. Similarly, one can understand why Schonberger says that the Japanese 'out-Taylorise us all' (1982) . 8. Sources : research by Rebecca Morales on GM-Toyota, and by myself and Kevin Morgan on electronics .

References

Abernathy, W .J ., Clark, K .B . & Kantrow, A .M . (1984) Industrial Renaissance: Producing a Competitive Future for America, Basic Books . Aggarwal, S .C . (1985) `MRP, JIT, OPT, FMS? : making sense of production operations sytems', Harvard Business Review, Sept-Oct, pp . 8-12 . Aglietta, M . (1979) A Theory of Capitalist Regulation : the us Experience, New Left Books . Altshuler, A ., Anderson, A ., Jones, D ., Roos, D . & Womack, J . (1984) The Future of the Automobile, MIT Press, Cambridge, Mass . Aoki, M . (1985) `Learning by doing vs . the bounded-rational control : an approach to Us-Japan comparison of industrial organisation', Center for Economic Policy Research, Stanford University, Publication

New developments in manufacturing No . 53 . Ballance, R.H . & Sinclair, S .W . (1983) Collapse and Survival: Industry Strategies in a Changing World, George Allen & Unwin, London . Bannon, E . & Thompson, P. (1985) Working the System, Pluto Press, London . Braverman, H . (1974) Labor and Monopoly Capital, Monthly Review Press . Burawoy, M . (1979) Manufacturing Consent, Univ . of Chicago Press, Chicago & London . Burawoy, M . (1983) `Between the labor process and the state : the changing face of factory regimes under advanced capitalism', American Sociological Review, 48, pp . 587-605 . Burawoy, M . (1985) The Politics of Production, Verso, London . Cockburn, C . (1983) Brothers, Pluto, London. Cole, R. E . (1971) Japanese Blue Collar, University of California Press . Cusumano, M .A . (1985) The Japanese Automobile Industry, Harvard University Press, Cambridge, Mass . Estall, R .C . (1985) `Stock control in manufacturing : the just-in-time system and its locational implications', Area, 17 .2, pp . 129-33 . Freeman, C . & Soete, L . (1985) `Information Technology and Employment : an assessment', mimeo, Science Policy Research Unit, University of Sussex . Garrahan, P . (1986) `Nissan in the north-east of England', Capital & Class, 27, pp . 5-13 . Hall, R .W . (1982) `The Toyota Kanban system', in Lee, S .M . & Schwendiman, G . (eds), Management by Japanese Systems, Praeger, pp . 141-151 . Haruo, S . (1981) `Japanese automotive capital and international competition (Part 2)', Ampo: Japan-Asia Quarterly Review, 13, (2), pp. 60-67 . Holmes, J. (1985) `Industrial change in the Canadian Automotive Products Industry, 1973-84 : the impact of technical change on the organisational and locational structure of automobile production', paper presented to the IBG/CAG Industrial Geography Symposium on Technical Change in Industry, University College, Swansea, 22-26 August 1985 . Hounshell, D .A . (1984) From the American System to Mass Production, 1800-1932 : the development of technology in the United States, John Hopkins University Press, Baltimore . Ichiyo, M . (1984) `Class struggle on the shopfloor - the Japanese case (1945-84)', Ampo : Japan-Asia Quarterly Review, 16, (3), 38-49. Ikeda, M . (1979) `The subcontracting system in the Japanese electronic industry', Engineering Industries ofJapan, 19, 43-71 . Kamata, S . (1982) Japan in the Passing Lane, Pantheon, New York . Kaplinsky, R . (1984) Automation : the technology and society, Longman . Kelly, J . (1982) Scientific Management, Job Redesign and Work Performance, Academic Press, London . Kelly, J . (1985) `Management's redesign of work : labour process, labour markets and product markets', in job Redesign: Critical Perspectives on the Labour Process, D . Knights, H . Willmott & D . Collinson (eds), Gower . Littler, C .R . (1982) The Development of the Labour Process in Capitalist Societies .

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Littler, C . R . (1985) 'Taylorism, Fordism and job design', injob Redesign : Critical Perspectives on the Labour Process, D . Knights, H . Willmott & D . Collinson (eds), Gower . Littler, C .R . & Salaman, G . (1984) Class at Work, Batsford . Massey, D . (1984) Spatial Divisions of Labour, Macmillan, London . Miller, J .G . & Vollman, T .E . (1985) `The hidden factory', Harvard Business Review, Sept-Oct, pp . 142-50 . Monden, Y . (1981) `What makes the Toyota production system really tick?', Industrial Engineering, January, pp . 37-44 . Monden, Y . (1983) Toyota Production System, Industrial Engineering and Management Press, Atlanta . Morgan, K . & Sayer, A . `A modern industry in a mature region : electrical engineering in South Wales', Sussex University Urban and Regional Studies Working Paper No . 39 . Murray, R . (1972) `Underdevelopment, the international firm and the international division of labour', in Towards a New World Economy, (Papers and proceedings of the Society for International Development, The Hague, 1971), Rotterdam, Rotterdam University Press . Ohno, T . (1982) `How the Toyota production system was created', Japan Economic Studies, Summer, Vol . X, (4), pp. 83-103 . Palloix, C . (1976) `The labour process from Fordism to neo-Fordism', in The Labour Process and Class Struggle, Stage 1, pp . 46-65, London . Peters, T . J . & Waterman, R . H . (1985) In Search of Excellence : lessons from America's best-run companies, Harper and Row, New York . Piore, M .J . & Sabel, C .F . (1984) The Second Industrial Divide, Basic Books, New York . Riley, J . (1985) `Factories automate before their time', Computer Weekly, 23 May . Rosenbloom, R .S . & Abernathy, W .J . (1982) `The climate for innovation in industry : the role of management attitudes and practices in consumer electronics', Research Policy, 11, (4), pp . 209-225 . Sayer, A . (1985a) `New developments in manufacturing and their spatial implications', Urban and Regional Studies Working Paper No . 49, University of Sussex . Sayer, A. (1985b) `Industrial Location on a World Scale : the Case of the Semiconductor Industry', in A .J . Scott & M . Storper (eds), The Geographical Anatomy of Industrial Capitalism: Production, Work and Territory, Allen and Unwin . Shaiken, H . (1982) Work Transformed: Automation and Labor in the Computer Age, Rineholt and Winston, New York . Schonberger, J . (1982) Japanese Manufacturing Techniques : Nine Hidden Lessons in Simplicity, Free Press . Sheard, P . (1983)'Auto-production systems in Japan : organisational and locational features', Australian Geographical Studies, 21, pp . 49-68 . Sugimori, Y ., Kusunoki, K ., Cho, F . & Uchikawa, S . (1977) `Toyota production system and Kanban system . Materialisation of just-intime and respect-for-human system', International Journal of Production Research, Vol . 15, (6), pp . 553-564. Suzaki, K . (1985) `The application of Japanese competitive methods to us manufacturing', Journal of Business Strategy, 5 (1), Winter, pp . 10-19 .

Peter B Meyer

General Motors' Saturn Plant : a quantum leap in technology and its implications for labour and community organising • THE GENERAL MOTORS Corporation, in the most widely publicised search for a new plant location in recent us history, finally announced in July 1985 that it would locate the facility for production of its new Saturn car in Spring Hill, a town outside Nashville, Tennessee . The nature of the new manufacturing facility - and the search process which GM followed in locating a production site - represent major departures from past industrial processes and practices . These differences constitute qualitative restructurings of both labour and community relations for the company . The production innovations which are already in practice or planned therefore represent processes which must be recognised and understood if progressive forces are to respond in order to protect labour and working-class interests . The announcement of a new plant to be developed at a cost of $5 billion (£3 .125 billion) attracted massive media attention to the Saturn car . The attraction of such a capital investment set off a wave of industrial promotion activity, as States offered GM choices of production sites (Centre Daily Times, 1985 : B-3 ; USA Today, 1985 : B-1) . Whether or not the plant would be a constructive addition to any local economy is a question which was generally overlooked . The headlong efforts to attract the investment appear to have ignored both the workplace and community implications of the nature of the new installation . Yet extensive information is avail-

Peter Meyer shows that GM's new Saturn Project involves a quantitative leap in the size and nature of capital investment and a dramatic relocation of production. He analyses its implications for the labour process and for the host community and argues that Isaturnisation' will have serious adverse consequences for both local communities and 73 workers' organisations.

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able on the plant . Specifically, the GM installation involves : a) a quantum leap in capital invested per worker ; b) new relationships between final goods production and the supplies of components and inputs ; c) a total reorganisation of the production process ; d) a major shift in the relations between a large manufacturer and the community in which it produces . None of these features are altogether new, and many aspects of this development have been instituted in other GM plants . The process of decision-making on a plant location suggests that a wholly new spatial structuring of production may be emerging, bringing with it a further decline in people's ability to control their local economies . GM'S massive levels of capital investment per worker and the restructuring of work along the lines of Japanese factories are already evident in other us and UK plants (Garrahan, 1986) . However, the inter-plant and spatial patterns of the Saturn plant and its production processes may constitute a reversal of the emerging patterns of international division of labour traced by Perrons in 1981, for all that the new plant exhibits extreme forms of what has been labelled `flexible specialisation' . This new organisation is not a matter of labour or labour market flexibility, but a much more pervasive shift in production processes . `Flexible specialisation' involves three elements, all of which are applicable to the Saturn case : • the utilisation of flexible equipment, which can produce different products in the same factory, eliminating needs for retooling ; • associated moves from production of standardised to specifically tailored products (produced for a known order from a consumer) and from routinised labour to a labour force capable of participating in the continuous computer-controlled retooling on the shop floor ; and, finally, • a decentralisation of production, as the ability to produce efficiently at a smaller overall size of factory increases the possibility of maintaining several plants producing the same product mix close to consumers to save shipping costs . We will return below to the implications of these elements of flexibility for the distribution of economic power . This paper will first review the us economic context in which the new General Motors initiative has been undertaken, since this setting suggests that the Saturn case is an example of a broader process .' Then we will move on to the nature of the proposed plant and the process of the search for a site for the production facility . Next, we will examine the specifics of existing GM production initiatives and the company's announced

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plans for the Saturn plant . Finally, we consider some implications for labour and local economies of the presence of a plant such as that designed to produce the Saturn . The 1982-1984 expansion was the most massive wave of new domestic capital investment ever experienced, according to us Department of Commerce figures (Kettering, 1985) . Investment in producers' durable goods rose 33% in the eighteen months from the fourth quarter of 1982 through the first quarter of 1984 . This rate is double the rise in comparable expansions since the 1950s . This rise was led by investment in the `office machinery' category, which includes all computers, regardless of purpose ; this sector alone accounted for 31% of net new investment in durables . 2 Investment in plant and equipment reflects both relocations and efforts to restructure production . We find a 13 .1% increase in such investment over the period, compared to a 3 .6% increase in earlier expansions, with investment in new plant and equipment by manufacturing firms up 16 .8%, well above the national average . In fact, this difference is probably accounted for by only two manufacturing sectors, both of which have been world-wide leaders in robotics and new methods of production . Motor vehicle producers increased plant and equipment investment by 33 .9% in the 1982-1984 period . 3 Electrical machinery manufacturers, including elements of the computer industry, increased investment by 28 .7% . They have been driven to invest by expanded demand and by pressure to upgrade products while routinising (and lowering costs in) production . In the us case in particular, much of the impetus for this new investment derives from the Reagan administration's so-called Economic Recovery Act of 1981 : Under the old tax law, effective tax rates on new investment range[d] from a high of 53 .2 per cent in services and trade to a low of 25 .8 per cent in motor vehicles . . . Under the new law, the effective tax rates ranged from 37 .1 per cent to -11 .3 per cent for the same industries . The reduction in effective tax rates on new investment for most industries ranged upwards from 50 per cent, and for several industries besides motor vehicles, the effective tax rate was negative (Kettering, 1985 : 28) . The rationale for such shifts offered by the government was the need to stimulate investment for creation of jobs . But, as Table 1 shows, the reality of the job impact of these investments belies this logic . The us economy did, in fact, gain 6 .3 million jobs in the first

The context : the US economy in the eighties

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18 months of the expansion, of which 4 .6 million were `new' jobs (Young & Lawson, 1985 : 29). The composition of the new employment, however, shows a massive shift away from manufacturing employment. Durables manufacturing, in which the major new investment was concentrated, experienced a net employment loss of over 5 per cent since July 1981, while markets and output expanded . This certainly suggests that the new investment was not job-creating, but rather labour-replacing . While roughly four services-producing jobs were created for every goods-producing job lost, the nature of the new jobs, and their skill and wage levels, are simply not comparable . Wholesale and retail trade and the three services subsectors constitute the source of most of the new jobs . All these sectors are characterised by severely bimodal salary and wage structures, with gaps gradually worsening as a result of technological change . The vast majority of the employment in these sectors is low waged, certainly not producing incomes comparable to those once available

Table I

us private non-agricultural employment change, 1981-1984 Economic sector (selected elements)

Total non-agricultural private Goods producing

Manufacturing Durables manufacture Electrical & electronic equipment Transportation equipment Fabricated metal products Primary metal industries Machinery, except electrical Non-durables manufacture Services producing

Transport & public utilities Wholesale & retail trade Restaurants, bars, etc . Finance, insurance & real estate Services Miscellaneous services Business services Health services

Employment (000s) July 1981 May 1984

75,428 25,701 20,341 12,222 2,107 1,919 1,608 1,134 2,514 8,119

77,864 24,851 19,570 11,598

49,727 5,179 20,611 4,749 5,311 18,626 9,774 3,271 5,581

52,013 5,144 21,658 5,183 5,662 20,549 10,497 3,979 6,073

2,228

1,906 1,469 887 2,203 7,972

Change 000s per cent

2,436 -850 -771 -624 121 -13 -139 -247 -311 -147

3 .23 -3 .31 -3 .79 -5 .11 5 .74 -0 .68 -8 .64 -21 .78 -12 .37 -1 .81

3,286

6 .61 -0 .68 5 .08 9 .14 6 .61 10 .33 7 .40 21 .64 8 .82

-35 1,047 434 351 1,923 723 708 492

Source : Young, H .H . & Lawson, A.A . (1985) `Where Did All The New Jobs Come From?' in us Department of Commerce, Bureau of the Census, us Industrial Outlook 1985, p . 32 .



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in durable goods manufacture . Job gains in services, therefore, do not correct for the displacements caused to workers from the goods-producing sectors, and the communities in which they live . General Motors' 1984 announcement of its Saturn plant initiative thus followed a period of major capital expenditure, during continuing decline in manufacturing (and urbanised) employment in the us . It symbolises the emergence of an economy with workers isolated in low-paid service sectors while robots take over the higher-paid occupations in manufacturing . The new plant, and the decision processes leading to its location, thus serve as pointers to elements of the future for manufacturing in advanced capitalist countries . The Saturn Corporation has issued pronouncements about both the physical characteristics of their planned plant and about the manner in which the work process within it would be organised . For the sake of clarity, we deal here with the specifications which the company has made available, and their implications for the location search process . We then turn to practices and labour relations in the next section . 4 The $5 (£3,125) billion plant (of which, according to some reports, only $3 .5 (£2,188) billion will be plant and in-plant equipment, with the rest operating capital) will produce 6,000 jobs at the site . Thus the intended capital invested per worker amounts to between $583,333 (£364,583)-if we count only fixed capital and $833,333 (£520,833) - if we count total capital committed . Either figure represents a major departure from the $70,000 to $80,000 (£43,750 to £50,000) invested per worker on average in us manufacturing . This quantum leap in investment concentration, the innovative nature of the facility, and the specific space and layout requirements of just-in-time production generated a detailed list of site requirements for the plant . Gm advertised the following requirements as the minima which needed to be met for consideration of a site for the plant . (1) A vacant site of a minimum of 600-1,000 acres ; (2) immediate access to interstate highways (motorways) and one, preferably two, main-line railways (rarities in the us) ; (3) location within 30 miles of a city with a population of 250,000 ; (4) an available aluminium smelter and a network of parts suppliers within 200 miles or five hours by truck (for implementation of the Kanban, or just-in-time production system) ; (5) available utilities and raw materials consisting of: • 400 million kilowatt-hours of electricity (80 megawatts daily) ;

The Saturn plant : physical characteristics and location choice

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• 400 million cubic feet of natural gas ; • 2 .5-3 .0 million gallons of water waste treatment daily ; • 300,000-500,000 pounds of low pressure steam daily ; • 80,000 tons of coal annually ; and, (6) a local road and service network capable of handling a flow-through of 1,000 trucks daily (these are us tractor-trailers, which are substantially larger than the average European longhaul lorry) .

Additional specifications arose in company statements to different political and journalistic figures, including the need for a `world class' aesthetic site, various requirements regarding living amenities, and similar `soft' criteria . The lucky winning locality, which would have to attract not merely the Saturn Corporation executives, but the United Auto Worker (UAW) representatives who were participating in the site selection process, would gain substantially, according to the company . Advertised benefits included : (a) 6,000 jobs in the plant, to be given to UAW union members who were laid off at other plants of the company ; (b) an inmigration of 25,000 persons, and the economic expansion associated with growth ; (c) 14,000 additional new jobs in suppliers and others who would be attracted to the area by the GM plant or expand local operations ; and, in sum, (d) $500 million to the local economy in payroll annually . Nowhere in the company's statements, nor in the publicity released by hundreds of local development agencies promoting their vacant sites, has there been any mention of the potential negative impacts and very real economic costs associated with the construction and operation of the Saturn plant . In locating its new plant, GM broke with traditional practice for plant site searches, which are normally conducted quietly . Saturn announced its construction plans, indicated that it needed information on potential locations, and described its supposed decision process to the media . It was explained that a state would be picked prior to selection of a particular manufacturing site within the state. This sequence assured heavy inter-state competition . The future stipulation that only one proposal offering all qualifying sites would be entertained from each state `in order to avoid bidding wars between the states' assured that major concessions and tax rebate offers would be included in the proposals of available sites . In the end, 38 of the 50 us states offered a total of 1,000 different sites (Sawyer, 1985) . Standardised proposal submission formats specified by the

General Motors 79

Saturn Corporation successfully socialised many costs of site selection data processing . This social cost pales in comparison to that generated by the search's impact on economic development practice . A whole new revival of community boosterism and efforts to `sell' a locality to non-local investors has resulted . Campaigns to attract the plant included community-wide rallies and meetings, letter-writing campaigns, car caravans to the new corporation's headquarters in Warren, Michigan, and billboard advertisements directed at corporate executives and at GM workers . These efforts are virtual throwbacks, given more recent emphasis on tactics which build on local resources and enterprises . The only innovations are really the appeals to workers . These appeals were launched as a result of the joint announcement by GM and the UAW that they would cooperate in the Saturn site selection, and that the choice had to be acceptable to the GM workers who were likely to be employed in the new plant . (Laid-off GM workers from around the nation are to have first priority in employment at the new plant .) This cooperative effort cost the UAW dearly in internal cohesion . The wounds still have not healed, and conflict remains over the tactic of cooperation in job and work restructuring . Appeals to workers from towns with sites have included offers of subsidised mortgages, free land, and other amenities . These offers represent a peculiar utilisation of locally-controlled public and private capital which is normally offered to companies in order to attract them . They appear to be due to local officials' belief that there was significant UAW influence on the Saturn location choice - and on the absence of options for use of the funds . Local capitals are simply unable to provide subsidies sufficient to influence a $5 billion investment decision . The choice finally made, Spring Hill, Tennessee, appears to violate many of the announced selection criteria, most notably those associated with in-plant processes of just-in-time production and proximity to a city labour pool . 5 It is, however, in the state in which Nissan chose to locate the first Japanese assembly plant in the us, a plant which remains non-union . Tennessee has `right-to-work' laws outlawing closed union shops, so Saturn - a guaranteed union plant - provides a strong 'toe-hold' for the UAW in the state . We turn next to the new processes and relations of production planned for Saturn assembly in Spring Hill . The Saturn plant represents not a start in GM's efforts at the transformation of production, but a culmination . While the facility will not be as advanced in certain aspects of its processes as others operated by GM, it will be unique in its combination of a

General Motors' on-going efforts to alter production processes

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number of discrete elements (International Auto Industry Newsletter, 1985 : 11) . The Saturn plant will incoporate 'just-in-time' inventory-free production, discrete work-groups who will control much of the production process, and a high degree of automation and roboticisation of production tasks . Each of these elements has been tested at existing GM facilities . Just-in-time production, or the Kanban system for minimising inventories, has a significant history in Japan, and it is in place in a number of GM plants in the us (Glasmeier & Patrizi, 1985a : 4-8) . The system calls for delivery of parts directly to the assembly line or work station by trucks sent from suppliers responding rapidly to orders for production inputs . The rule of thumb for Kanban operations has been that suppliers should be within five hours' drive, or 200 miles . No significant parts inventory is maintained, with attendant savings in inventory carrying and warehousing costs . The efficiency of the just-in-time process is dependent upon orders for replacement of inventory which emanate from the shop floor, the ease with which materials, when delivered, can be brought directly to the place in the plant where they are used in the production process, and a rapid response capability on the part of suppliers and the shipping firms delivering inputs . The first two requirements are addressed by the design of the production facility and its organisation, while the last element is served by a careful selection of the plant location and sources of parts and other inputs . General Motors' 'Buick City' plant in Flint, Michigan, which is supposed to maintain at most a 48-hour inventory of parts and components, represents what is, perhaps, the most advanced prototype for the Saturn effort . The facility has cut inventory costs by 80% and is stimulating the opening of new plants by supplier firms in the immediate area, as a means of serving the auto producer's demands for very precise input delivery schedules . 6 Small team-oriented work groups, rather than isolated individuals on an assembly line, will characterise the Saturn plant production organisation (Business Week, 1985a : General Motors, 1985 : 9-12) . Separate foremen and inspectors will be eliminated, and small 6-15 person work units will not only organise themselves, but will schedule vacations, have the right to screen and `accept' new members when the company hires, and order input components from supplies as they need them to produce . All workers will be salaried, with bonuses tied to production, and the shop floor work teams' suggestions for altered production methods or processes, as well as for design changes, will have to be considered by the company, according to the terms of the union contract signed 26 July 1985 . The input to

General Motors design represents a major extension of the existing practice, as it has developed at GM's Orion, Michigan and Wentzville, Missouri, plants, as are the very small work units, which will operate without direct management input . This new organisation of production constitutes an extension of `flexible specialisation' from a focus on inter-firm competition and multiple sourcing to an effort to create the same adaptability and responsiveness within a single plant . Such flexibility is new to the us automobile manufacturing scene, but is common in the industry in other countries . Japan is not the only precedent, although the us manufacturers have tended to look east for models . Western Europe has long relied on piecework incentives for auto workers . German workers traded their rights to limit flexible deployment of labour for relative employment security decades ago . In the us, the UAW has relied on national negotiations and contractually enforceable seniority rules and grievance procedures to protect workers, downgrading the importance of shop floor control considerations (Tolliday & Zeitlin, 1986) . The Saturn contract rewrites the traditional us automobile industry labour-management relationship : individual work teams, competing for production bonuses, could well replace the competitive pattern of small sub-contractors which has been evidenced in electronics, clothing manufacture and substantial portions of the (non-union) construction industry in the us . This restructuring of the production process requires change in both the technology and the personnel relations of the automobile assembly plant . The cybernation is obviously in process, and GM's prototype plants already provide training in interpersonal relations for workers . Such education is to be expanded for employees in the Saturn facility (and will no doubt deal in detail with the competitive possibilities for earning bonuses by increased productivity) . Automation and roboticisation (cybernation) of individual tasks will not be as extreme in the Saturn plant as GM plans for other facilities . In fact, the `factory of the future' attempted in Saginaw, Michigan, is intended to have the capacity to function under `lights out' conditions, with no workers, which will not be possible in the Saturn operation (International Auto Industry Newsletter, 1985) . While Saginaw is not, at present, measuring up to expectations, lessons from its design and operations will contribute to the Saturn facility development . GM's Orion and Wentzville plants have roboticised 93% of all welds on their cars, as compared to the standard 18% of the early seventies, and incorporate literally thousands of programmable automated functions in the assembly process (General Motors, 1985) . Neither of these plants is operating as well as GM had hoped they would, but their experiences

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will also serve the planners of the new facility . Saturn appears to be a critical element in GM's move towards computer integrated manufacturing (cIM) . It will serve both as a testing ground and as a showpiece once operational . Since it is not intended to feature the most advanced automation and related production advances, but to combine features of all the innovations at a single site, GM'S current problems with its most technologically advanced plants will not necessarily affect Saturn directly . As GM's Chairman, Roger Smith, noted after the firm's problems with newly automated assembly lines emerged last Spring, `We just set too ambitious a schedule - we have to go a little slower' (Business Week, 1986 : 103) . The Saturn schedule has been pushed back to a 1990 rather than 1989 production start-up . Overall, the new car is intended to be produced with 21 labour hours per car as compared to the 1985 standard of 55 hours or the 1980 norm of 80 hours . This saving will be accomplished by extending the existing levels of automation through the application of a complex and fully integrated computer network (Business Week, 1985) .' Robotics, computer vision and minimal inventories are, however, just part of a broader shift . The Saturn facility will not be `a plant' . A complex of computer-coordinated production and assembly facilities is being built in one location . The site plans and specifications call for a facility with two foundries, a stamping plant, a components factory and an assembly building, supported by a network of nearby suppliers (Erie Daily Times, 1985) . The logic of the integration is that on-site production should include manufacture of the low-value, high-volume components which are inefficient to ship or store . This facilities integration, combined with the modifications on the shop floor, are intended to produce an overall 33 per cent decrease in the indirect (non shop-floor) labour costs of an automobile . This saving is made possible by the elimination of many management functions and reduced costs for quality control . The combination of modifications of the assembly process and the amalgamation of production facilities qualify as `an experiment in reinventing the manufacturing process' (Newsweek, 1985 : 65) . 8

The key to these modifications is the new Manufacturing Automation Protocol (MAP) . This software is the epitome of the application of information technology (IT) to production . It accomplishes a coordination across machines on the shop floor which has never before been possible, even with machines from the same tool manufacturer (Bylinsky, 1985) . Still under development by GM subsidiary Electronic Data Systems (EDS), current versions are provided free to other users by GM; the MAP standard

General Motors 83

has been adopted by the machine tool and computer industries . 9 At its lowest level of application, MAP could reduce the time required for retooling to produce a different part from three days to 10 minutes, during a worker coffee break . At its highest level, MAP, in a fully developed system of computer integrated manufacturing (CIM), could take car orders from showroom to shop floor electronically and virtually instantaneously . The changes in production and delivery of new cars that the Saturn Corporation portends involve massive and diverse implications for the motor car industry in particular and production in general . Evidence abounds that the massive jump into CiM on the part of us car manufacturers has not worked out as planned (Winter, 1986a ; Winter, 1986b ; Business Week, 1986 : 103-104) . Machines on the shop floor are generally doing what was projected for them, but the new resources are not being used efficiently . The blame is generally placed on management, both for expecting too much of the combination of computers and robots and for failing to prepare personnel - both on the shop floor and above to use the technology efficiently (Arnoholt, 1986) . The fact remains that the management changes are coming, and the technology's potential will at some point be more fully realised . This is already evident in General Motors . The company's acquisition of Electronic Data Systems was the marriage of two vastly different management and corporate styles, the former complacent and top-heavy, the latter lean and profit-driven . EDS remains a small part of GM, but its style is spreading beyond the 10,000 data processing personnel reassigned from the parent firm to its subsidiary after the purchase . The clash of cultures appears to have been at least partially intended by Chairman Smith, and the creation of Saturn as a separate corporation (a legal structure not employed by Ford or Chrysler for their similar new car/new manufacturing projects) may have been intended to permit a different style of manufacturing management to emerge (Brody, 1985 ; Management Today, 1986) . The Saturn Corporation's role in altering its corporate parent has been described by GM President F . James McDonald : If Saturn were successful all by itself, it would not be a successful venture for General Motors . All of the ideas and inventions and philosophies that we come up with for Saturn must flow through the rest of General Motors if this is to be a successful venture (quoted in Lowell, 1985 : 37) . A massive management change is already implied by Saturn, along with a restructuring of manufacturing geographically and within individual plants . As these changes transfuse to the rest of

Implications of the 'Saturnisation' of production

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and to heavy manufacturing industry in the us as a whole (in which many Saturn-like experiments are ongoing), capitalism itself will change . We cannot deal with all the implications of the reorganisation of work and production in this article, but address two critical effects of 'saturnisation', impacts on the shop floor, and in the local economies in which production takes place, before returning to broader implications . GM,

Shop floor effects

The most obvious change on the shop floor is the absolute decline in the number of workers required . If the whole MAP system for manufacturing customised cars to customer order is implemented, GM's new methods `cuts 75 to 80 per cent out of labour, including management', according to David Cole, Director of the Office for the Study of Automotive Transportation at the University of Michigan (Newsweek, 1985 : 66) . The Saturn plant will have 6,000 workers producing 500,000 cars per year . By extrapolation, a typical 10 million car annual us sales volume would require a mere 120,000 workers, including managers ; employment in the industry has remained at about the 700,000 level even through the Reagan recession (Trachte & Ross, 1985 : 210) . Another change is a reversal of the link between automation and isolation of individual workers . One pattern often evidenced by increased use of ever larger machines in the workplace was the physical, and thus emotional, isolation of workers from each other . The work group schema will reduce this isolation . The change, however, will come under conditions and structuring of interaction dictated by General Motors, and may not reduce alienation . Fiat has used such workgroups to undermine union militancy in its new plants (CSE Microelectronics Group, 1981 : 87-92), while Nissan has used the groups for explicit social control of workers (Garnett, 1985 ; Garrahan, 1986), and Ford has demonstrated that the pro-company socialisation of such teams can even result in maintenance of production and company loyalty in a plant whose closing is announced and known to workers (Hansen, 1984 : 14) . Some very real new powers will be vested in the work units, at least for a time . They will have control over their own shortterm inventories and responsibilities for monitoring and repairing equipment, as well as for ordering supplies, parts, and so on . GM's announcements discuss the further development of robot sensing devices which will permit automatic checking of the volume of supplies and parts in stock and could automate ordering of production inputs through MAP . In other words, the powers apparently offered the work units represent actions which have already been routinised to the point at which machines could execute the functions ; it is only the computers' temporary

General Motors inability to `see' the stock available that forces a human participation in the process . 10 The hierarchy of `bosses' above the level of work units will also change, with all decision-making units including some union representation . Representation will supposedly be translated into real power through the requirement that all decisions be made by consensus (Business Week, 1985a : 48) . Since the `Strategic Advisory Committee', which will be at the top of the pyramid, consists of the Saturn President, a top unw official, and their staffs, it may be argued that the process of company management will be transformed to an ongoing process of companyunion negotiations . The United Auto Workers will retain their right to strike ; the participation model, however, may reduce such confrontations in practice . The style of management for the Saturn plant comes from that developed by the Japanese and now being implemented in the West (George & Levie, 1984 ; Winter, 1986a) . The work groups and cooperative management conditions are so essential to the General Motors plans for Saturn production that the company and the United Auto Workers inked a contract covering plant organisation and work-rules one week after site selection was completed, some two years before production in the plant would begin . 11 The new work rules may be suspect simply because they are clearly so critical to the company's plans (Brown, 1985) . On the other hand, such work rules, where implemented, seem to have won significant worker acceptance . The New United Motor Manufacturing Inc . (NUMMI) plant in California, a GMToyota joint effort, appears to be a labour relations success . The majority of workers at NUMMI have long been members of one of the most anti-management locals in the United Auto Workers, but they have accepted the new work rules, absenteeism is down, and the plant, which is a clone of an old Toyota facility, is one of the most efficient and highest quality output plants for GM in the us (Winter, 1986a : 33) . The productivity levels attained may be due to workers' fears of job loss, but an expressed management emphasis on people, not technology, and extensive worker training could have produced similar results . On the other hand, inter-group competition for production rewards may be driving up worker output . Piore and Sabel (1984) suggest that the flexible specialisation logic is organisationally tied to creation of independent `profit centers' within large firms competing with each other (p . 283), a pattern exhibited by the new GM reorganisation, and characteristic of restructurings of many multinational conglomerates . Thus they find that ` . . . the spread of [work group-based] flexible special-

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isation in the us would weaken the labor movement' (p . 277) . Massey (1984 : 31) suggests that such a reorganisation of production may generate a form of deproletarianisation of workers . The apparent power acquired by shopfloor workers may lead them to perceive themselves as 'semi-autonomous workers' . A shift in their self-definition of class status may in turn reduce union participation and militancy . If saturnisation is the wave of the future for manufacturing in advanced capitalist countries, it promises further declines in organised labour as we know it today . New approaches, and perhaps new organisational forms, will be needed to address this potential threat to worker quality of life . Locality effects

General Motors has recently been locating new plants in smaller cities and towns, where they become a dominant presence (Glasmeier & Patrizi, 1985a) . The Nashville area with over 250,000 population may not become a modern company town. However, the implications for Spring Hill and its 1,095 residents (as of 1984) are very different . If GM's estimates are accurate, the area will get 20,000 auto industry jobs, plus additional employment stimulated by the $500 million auto industry payroll . The political pressures to assist the source of such a large number of jobs will be massive, and the company may, if it wanted to, even be in a position to influence policy in the Nashville area . Its dominance in Spring Hill and its environs clearly will be unchallenged (cf. Watts, 1981) . This is not a state to which communities and workers should aspire, and, prior to the Saturn competition, was a route to new jobs which had declined in political acceptability in the us . Yet this political consequence is but one of a number of negative community effects of the Saturn plant location . The explosive economic and environmental changes in Spring Hill, augured by the five-fold increase in land values recorded there within two weeks of the GM site selection announcement (Sawyer, 1985), may prove negative for both current and future residents . These effects are often overlooked, since there is a divergence of interest between the people in a small economic area and the concerns of a larger region (or nation) . This conflict is well recognised in the context of plant closings and industrial restructuring due to new products displacing older ones . 12 There has been extensive documentation of the negative effects of rural industrialisation, with jobs accruing to immigrants and `original residents' becoming relatively worse off, both economically and socially . 13 Boomtowns, however large, appear to suffer uncompensated costs, as evidenced by Houston, Texas's recent fiscal crises (Feagin, 1985) .

General Motors

It is theoretically possible to parochially accept the point of view of the 1,095 residents of Spring Hill as the perspective from which to assess the Saturn development . A broader frame of reference would include those affected by the development of a new company town within the Nashville area . Regardless of the point of view examined, the speculative returns of property booms are not likely to be gains for either residents or immigrants . The impact of development on nearby property values is but one of a number of `who gains/who loses' questions . All are set in stark relief by the Saturn plant : at least 80% of the 6,000 jobs are to be offered to currently laid-off GM workers . This means that at least 25% of the 20,000 new jobs are reserved for non-residents . Worker inmigration, bringing 25,000 new people into the area, will put pressure on existing schools, sewer and water, hospital, and other public infrastructural facilities . To the extent that the 14,000 other auto industry jobs go to inmigrant workers (which will occur to some extent, especially for inmigrant companies), local benefits will be even lower . The public sector costs of inmigration will be shared by current residents and inmigrants alike . The local people are inclined to lose on balance, unless the linked job and payroll effects of the new employment are substantial . Moreover, the construction of the plant itself will create temporary population boom problems . Large numbers of specialised construction workers wil come into the community to work . With their families, they will create demands for local services and infrastructure which will vary from those of a geographically more settled population . Since such workers' wages are often paid in non-local political jurisdictions (such as their employers' headquarters), their presence may raise public sector costs (for accommodating them and their households) while failing to increase local tax revenues . Finally, the operation of the plant itself will impose local costs . A traffic volume of 1,000 trucks per day could generate air pollution, deterioration of roadbeds, and more noise . If the auto industry suppliers serving the GM facility also operate with justin-time processes (as GM is asking, and helping, them to do), the other 14,000 jobs may be associated with another 1,000-2,000 trucks per day . The industrial complex's demands for water, sewage treatment and utility services may add more to operating costs of services than the high volume industrial users will be expected to pay . All of these consequences may impose new cost burdens on existing business and residential users of utilities and public services, whether in Spring Hill or elsewhere in the area .

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Systemic effects

A social accounting of the local direct and indirect costs of a new plant would be in order in any development scheme (cf . Kapp, 1973) . The prior decision to award jobs to inmigrants makes the Saturn plant a special case, less likely than most to create local benefits . If such a plant contributed to long-term local economic stability, the share of benefits accruing to immigrants might not be that important . However, there is every indication that saturnised plants will increase local economic specialisation and thus contribute to instability . This problem may arise from the deepening of a vertically-tied local economic base around the auto plant, as suppliers locate near their (sole) market . The Saturn manufacturing system changes may affect auto parts supply firms as much as workers . Most suppliers, moreover, will be as powerless to resist the pressures as assembly plant employees . There are some 30,000 parts suppliers in the us, of whom only 900 have more than 25 employees (Glasmeier & Patrizi, 1985a : 3) . The firms manufacturing primarily for the `original equipment market' (OEM) are the giants in the industry, competing in terms of quality and performance on delivery requirements . It is these larger firms within the sector which have been briefed by GM with respect to just-in-time requirements, and who will be competing for (sole-source) participation in GM'S pains . Since extremely tight delivery times have not historically been required by auto producers, the parts manufacturers were scattered throughout the us ; a major contraction in their geographic spread will result from the implementation of the Saturn system (Piore & Sabel, 1984 : 290) . Single sourcing will be coupled to pressures for increased quality control and timely delivery . The latter pressure may produce spatial concentration of suppliers near their markets (which often will be a single plant, their sole customer) . This pattern, inherent in just-in-time production, flies in the face of the flexible specialisation approach, as both buyer and seller are dependent upon each other, and flexible links between different production units are sacrificed to delivery timing (and quality control) efficiency . There is thus an inherent contradiction in the effort to combine flexible specialisation for the organisation of manufacturing and assembly with minimal inventories and rigid quality control, which are facilitated by limiting the number of sources of inputs . Sectorai geographic concentration of production may once again come to dominate the manufacturing landscape, reversing recent dispersion and diversification trends . While components suppliers using MAP-controlled cybernated processes may be able to produce a variety of products for buyers, their ability to deliver on time across space may remain limited, and they will thus have to

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specialise . The form of the new concentration may differ substantially from the old, with vertically-integrated concentration replacing the horizontal concentration which produced steel towns, auto cities, textile centres and the like, but the tendency towards instability may remain . Such a new pattern would reflect a renewed concentration of power as well . The producer of the final product shipped from an area may be a relatively small employer in the local economy . If, however, the other employers are vertically tied to that firm, being up the line in the production process or dependent on its payroll, that manufacturer may wield powers comparable to those of the owners of company towns earlier in the industrial revolution . The Saturn ideal appears to be tightly structured, narrowly focussed specialised production by dependent manufacturers for the auto industry or other producers of high volume final consumer goods . The restructuring of an economy for extremely efficient production of current products will create narrow vertically-tied geographic concentrations of rigid, rather than flexible, specialisations . Manufacture in one location for sale at a number of different places, or for distribution to a number of users of a producer's input may become impossible . The putative independence of even relatively large providers of inputs may be a matter of style, not substance . Separation of ownership and control is not merely a characteristic of the modern corporation, but also of its relationships to its production locales : ownership is no longer necessary to create a company town . Massey has noted that 'single-region production is not a spatial structure which can be uniquely associated with oldfashioned capital' (1984 : 81) . We have demonstrated that the Kanban imperatives promote such structures today . And yet, Aydalot is certainly correct in suggesting that economically strong and healthy regions are those `capable of developing varied sectors rather than regions which have a structure favorising [sic] a particular sector' (1984 : 47) . It thus appears that saturnised reindustrialisation is a throwback, recreating local specialisation where none is required for geographic reasons, and shifting power back to corporate interests in the process . To this point in this paper we have ignored the chracteristics of the new car to be produced in the innovative facility . The media attention garnered by the new plant and the site selection process also overlooked the features of the car (Smith, 1985) . Yet the car itself, and its place in General Motors' marketing strategy, are critical to the success of the Saturn project since, at a volume of 500,000 vehicles per year, the plant is targetted to sell 5% of the

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total us annual volume of new car sales . GM has shifted position on the market niche that Saturn is expected to fill as time has passed . In 1984, the project was initially announced as a `new, domestic, entry-level small car . . . to fight low-cost imports' but it eventually emerged that `Saturn would move upscale where the profits lie' (Lowell & Smith, 1986) . In fact, one of the rationales offered for the choice of a Tennessee location was proximity to the major geographic concentrations of the `yuppie' population of young professionals to whom it would be sold . In other words, the car is not to be a competitor for the low end of the market, and GM is following the same route as other us automakers in joint ventures and imports to fill the entry-level car niche. 14 Saturn will probably substitute for the 'J-cars' and other mid-range GM models, for which there is a stable and growing us market . The plant may well succeed in filling this niche ; its rationale is instructive in any event . This new technology and production logic symbolised by the Saturn plant can be characterised in a number of ways : it is more efficient, it saves labour inputs, it disciplines labour ; it implies concentration of production, it imposes higher demands for social support (infrastructure and the like) per worker than prior technologies, and so forth . These descriptions are accurate, but they fail to provide a full picture . The implications of saturnisation of production can only be understood if the processes and logic we have sketched out are applied throughout the economy . The obvious problems developing for realisation of surplus as more and more workers are deprived of jobs is not the essential factor . 15 The new factor is inflexibility in production systems . That rigidity emerges from the flexible computer-aided manufacturing processes which lie at the core of the Saturn production system is, obviously, a contradiction . Geographic concentration of production implies that decline in the demand for any one final product (for whatever reason) will produce widespread depressions in the localities specialising in that product . Other, equally specialised, production centres will experience decreasing sales due to reduced demand from the depressed areas, and will not be able to generate compensating employment . Simultaneously, the firms suffering from increased demands for their products will be hard pressed to modify their outputs . Any one computerised stage in the production process may be modified to produce a different product . The entire system, with all the sole-sourced backward linkages to input producers, is not, however, a flexible structure. Certainly any one plant and its suppliers could produce other products, but any efficiency loss



General Motors

would undermine the price competitiveness of outputs relative to the products of specialised producers elsewhere . A decline in demand thus could produce high localised unemployment combined with underutilised local public infrastructure . These conditions, in turn, will generate additional fiscal pressures on the less depressed portions of the economy, further undermining the privately realisable surplus and/or net wages . The source of the crisis will, probably, be underconsumption of domestic goods, rather than overproduction, to the extent that the GM plan of producing a car only for a specific customer order becomes the accepted practice in durables manufacture . But the instability will remain a very real probability, and will tend to expand from the centres of initial employment loss to other specialisd centres in the economy . Aydalot, characterising older industrial areas in a review of new spatial trends in France, neatly described the local impact of concentrated private production :

91

The ability of industrial activity to reshape its environment in terms of its needs will in the long term ruin that very environment : industry implies integration into spheres of all types of exchanges which transcend regional limitations . From this point on industry is characterised by the increasing vulnerability of the environment or regions which it inhabits . Since it imposes forms of organisation which will die with it, it destroys the earlier forms of organisation which might have been able to ensure perpetuation of these environments (1984 : 58) . The destruction of diverse local economic and social structures implied by the concentrated power of saturnised production renders his statement as good a forecast as an assessment of earlier industrialisation .

1. Increasing production without increasing employment was evident long before the advent of the saturnised plant . Steel output in Northeast Indiana, for example, rose over 50% between November 1982 and May 1984, a major recovery . However, the employment in the area's steel mills fell 10% during the same period (DuBois, 1985 : 3) . The man hours of labour employed per tonne of steel poured in Indiana actually fell 31 between March 1981 and May 1984, or almost 10% per year (DuBois, 1985 : 71) . This labour saving was attained without the new forms of computer control and robotics proposed by General Motors . The eventual job loss impact of the new technologies, when combined with rationalisations already employed, is staggering . General Motors made two multi-billion dollar acquisitions in 1985 which may pay off in profits only if the tools for the rationalisation

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proposed for the Saturn plant become products sold by the company to other manufacturers . The acquisition of Electronic Data Systems provided GM with one of the most advanced electronics communications and control software houses in the world . Purchase of the Hughes Aircraft corporation integrated the most advanced electronic `vision' hardware equipment operation in the us into the corporation . The combination of the two capacities not only makes the Saturn objectives more readily attainable, but places the corporation in a position to sell `packages' of the software and hardware to other manufactures (Bylinsky, 1985) . This potential sets the Saturn plant on a different plane from simply the production process for a single marque of car : the plant may be the showpiece which will enable GM to market its services for further application of the software/hardware combination . It also suggests that what emerges in the Saturn plant is a model of future manufacturing processes to which major us corporations aspire. 2. The data on new investment are taken from V . Kettering, 1985, and are not cited individually, since virtually every page of his empirical report, `Capital Investment in the us Economy : Current Recovery Compared to Previous Recoveries', would have to be referenced . 3. This figure, of course, includes new us plant construction by Japanese and other foreign firms, as well as activity by us-based companies . 4. The following is a composite, drawn together from media reports on the specifications announced by the company, company annual reports (1984, 1985) and industry journal reports . See (all 1985) : New York Times; Newsweek ; Business Week ; Ward's Automotive World . 5. See, for example, Glasmeier and Patrizi, 1985b, on the distribution of component suppliers in the us . 6. Selection of the Tennessee site in light of some distant supplier locations suggests that GM may put significant pressure on major components providers to open new facilities in the Nashville area . 7. The limits of labour-saving associated with robotics have been repeatedly noted by those who suggest that fears of massive job losses in the future are Luddite and not based on documentable fact . These claims are founded on the limits of current computer controlled tools : `Most robots, however, still lack vital sensory functions like touch and sight that would enable them to completely replace workers on the factory floor' (Dollars and Sense, 1985 : 9) . The Gm acquisitions of Hughes and Electronic Data Systems are expressly intended to facilitate the development of such robotics capacities . Winter, 1986a, cites problems with vision systems already installed in auto plants . 8. This experiment is, itself, part of a larger effort at changing the whole automobile industry, not merely the production side . The computer communications capabilities of EDS will be developed to permit manufacturing to respond to the sales results on a car-by-car basis . Each car proceeding through an assembly process will be customised to a particular buyer, who has already placed an order (Newsweek, 1985 : 66-67 ; Business Week, 1985 : 128) . The objective of an integration of information from the sales floor and the shop floor is avoidance of any inventories of manufactured cars, carrying the just-in-time logic to its ultimate end . If all goes as General Motors expects, the Saturn will be deliverable in a maximum of a week, so dealers will no longer need to keep inventories of vehicles on hand for



General Motors

buyers who want rapid delivery . The rapid response with a customised product will thus decrease overall costs even after the car leaves the assembly building, and decrease the time required for capital to complete its circuit . 9. The MAP protocol now in the public domain made its official debut in November 1985, but it had been in circulation in earlier forms for over a year . In fact, a MAP Users Group was formed in 1984 and rapidly grew to over 240 corporate members, including the leaders of the machine tool and computer industries, as well as Ford, Chrysler, McDonnell Douglas, Kodak, and other leading us firms (Bylinksy, 1985) . Many firms have, in fact, already implemented partial MAP systems to improve their production f lexibility . GM itself will be a major factor in expanding the acceptance of MAP since, given the capital it has invested in software development, it seems inevitable that the firm will some day copywrite an advanced MAP system and market it . Recent experience with the latest technologies suggests that these 10 . powers may remain in workers' hands longer than the companies have anticipated . See Winter, 1986b, for a discussion of the limits to current roboticisation and uses of computer vision . 11 . The United Auto Workers' acceptance of this new contract obscures the ongoing conflict within the union . Argument favouring the contract claims that traditional agreements and the current negotiating philosophy `stifles innovation because workers fear job loss' . The hopes are that innovation will help preserve us jobs and that trading control over work rules for job security promises will provide that security (Malotke, 1985) . Opposition centres on the effective absorption of the union into the company by the shared decision-making structures, without adequate resources for union representatives to respond to company proposals and requests prepared by large corporate planning and labour relations staffs (Brown, 1985 ; Parker, 1985) . The decision to negotiate a contract on behalf of workers not yet hired and incapable of accepting or rejecting the pact has also been criticised . The controversy continues within the union, with the 1986 Convention narrowly rejecting a proposal to negate the Saturn contract . One person definitely hurt by the Saturn negotiations has been Donald Ephlin, the UAW Vice President responsible for the Saturn negotiations . His chances of ever becoming UAW President appear to have been sacrificed to the Saturn contract ; in fact, rumour has it that his original proposed contract was rejected unanimously by the union's Executive Committee, a body which had never before failed to approve a contract negotiated by a union Vice President . 12 . The issue here is not wholesale job destruction by technological change, but the loss of jobs in one industry and their re-emergence in another, generally with a spatial shift in production . One example is the replacement of vacuum tubes by transistors, which were produced in different locations from the products they replaced . Initial employment may not have changed as a result of the technological change, but the communities in which the production either grew or declined experienced negative effects which were ignored in the mainstream economic assessments of the change . Bradshaw and Blakely (1979) noted the negative effects on com13 . munity structures and informal support networks resulting from

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industrialisation . They suggested that there are substantial unmeasured social and economic costs associated with rapid growth . It has long been recognised that the actual employment gains recorded in rural areas through industrialisation generally fail to benefit the people most in need of new or higher incomes : the older workers, women and others at the margin of the local labour market (cf. Gay, 1969) . The external control consequences of a dominant employer are similarly well understood, and the specific impacts of dominant branch plants were recently documented by Watts (1981) . Even those who advocate rural industrialisation as the route to national development have expressed reservations and allude to the need to assure equitable distribution of benefits to the pre-industrialisation local residents (Tweeten & Brinkman, 1976) . 14 . An array of new `mini' cars is now hitting the us market, initially led by GM's own three-cylinder, Suzuki-manufactured Sprint, followed by the Yugo from Yugoslavia and South Korea's Hyundai (Moore, 1986) . GM's joint venture with Toyota, NUMMI, is also an apparent success . Thus, GM has adjusted its Saturn plans to meet this shift . 15 . This is not to deny that the success of Saturn will generate older plant closings and further worker layoffs elsewhere in the GM empire, which continues to be plagued by excess capacity . The shift in product type at Saturn, in fact, underscores the problem that the UAW has created by accepting a concession-granting contract for the Saturn plant, based on a need to meet foreign competition, without assurances that its eventual product would not compete with cars from other domestic GM plants .

References

Aglietta, M . (1979) A Theory of Capitalist Regulation . London : New Left Books . Arnholt, M . (1986) `People, not machines, are the answer' . WARD'S Auto World June : 38-39 . Aydalot, P . (1984) `The reversal of spatial trends in French industry since 1974', pp . 41-62 in J .G . Lammbooy (ed .), New Spatial Dynamics and Economic Crisis . Finn Publishers . Bradshaw, T . K, & Blakely, E . J . (1979) Rural Communities in Advanced Industrial Society . New York, NY: Praeger . Brody, M . (1985) `Can GM manage it all?' Fortune 8 July : 14-20 . Brown, W . (1985) `The Saturn Contract Fight' . Washington Post National Weekly Edition, 14 October : 27 . Business Week (1985) `How GM's Saturn could run rings around old style automakers' . 28 January : 126, 128 . Business Week (1985a) `How power will be balanced on Saturn's shop floor. 5 August : 48-49 . Business Week (1986) `Detroit stumbles on the way to the future' . 16 June : 103-104 . Bylinsky, G. (1985) `GM's road map to automated plants' . Fortune, 11 November : 34-36, 38, 40, 42 .

General Motors Centre Daily Times (1985) `General Motors enjoys free publicity of Saturn project' . 3 March : B-3 . CSE Microelectronics Group (1981) Microelectronics: Capitalist Technology and the Working Class . London: CSE Books . Dollars and Sense (1985) `From NC to CAD/CAM . 109 (September) : 9 . DuBois, T . (1985) The Call That Never Came : The Return of Steel Production Without the Return of Steel Workers in Northwest Indiana, 1979-1984 . East Chicago, in : Calumet Project for Industrial Jobs . Economist, The (1985) `Unemployment : not by services alone . 13 July : 32 . Feagin, J . R . (1985) `The social costs of Houston's growth' . International Journal of Urban and Regional Research 9(2) : 164-185 . Garnett, N . (1985) `A tough life on the line at Nissan' . Financial Times, 18 September : 14 . Garrahan, P . (1986) `Nissan in the north east of England' . Capital & Class 27 : 5-13. George, M . & Levie, H . (1984) Japanese Competition and the British Workplace. London : Centre for Alternative Industrial and Technological Systems . General Motors (1985) Tour Guide . Orion, MI : General Motors Orion Plant . Glasmeier, A .G . & Patrizi, K . (1985a) Pennsylvania, Ohio and General Motors : A Regional Partnership . Local Economic Development Assistance (LEDA) Project Report Rs-85-2 . University Park, PA : Pennsylvania State University Program in Community Studies . Glasmeier, A .G . & Patrizi, K . (1985b) The United States Auto Parts Industry . LEDA Project Report RS-85-5 . University Park, PA : Pennsylvania State University Program in Community Studies . Gray, I . (1969) Employment effect of a new industry in a rural area . Montly Labor Review, 92(6) : 26-30 . Hansen, G .B . (1985) Ford and the UAW Have a Better Idea : A Joint Labor-Management Approach to Plant Closings and Worker Retraining . Center Report 4 . Dearborn, MI : UAW-Ford National Development and Training Center (reprinted from The Annals of the American Academy of Political and Social Science no . 475, September 1984) . International Auto Industry Newsletter (1985) `Why Saturn may turn out to be a big flop' . 7(73), May : 11 . Kapp, K .W . (1963) The Social Costs of Business Enterprise . New York : Schenkman . Ketterling, V . (1985) `Capital Investment in the us Economy : Current Recovery Compared to Previous Recoveries' . Pp . 17-28 in us Department of Commerce, UU Industrial Outlook, 1985 . Washington DC : us Government Printing Office . Law, C .M . (1985) `The Geography of Industrial Rationalisation : The British Motor Car Assembly Industry, 1972-1982' . Geography 70(1): 1-12 . Locksley, G . (1986) `Information Technology and Capitalist Development' . Capital & Class 27 : 81-105 . Lowell, J . (1985) `Fewer workers and more models' . WARD'S Auto World, November : 36-38 . Lowell, J . & Smith, D .C . (1986) `Saturn, Alpha, Liberty : Better mousetraps?' WARD's Auto World, June : 49-50 . Malotke, J .F . (1985) `Automation and its impact on the labor force and

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the GM-UAW Saturn project'. Labor Law, Journal, XXXVI(8) : 568569 . Massey, D . (1984) Spatial Divisions of Labor . New York : Methuen. Moore, T . (1986) `Maxi hopes ride on new mini cars' . Fortune, 20 January : 41-43 . Newsweek (1985) `Wheels of the Future' . 17 June: 64-72 . New York Times (1985) `Many States and Cities Courting GM to Win Plant for Saturn Car' . 18 February : Al, A18 . Parker, M . (1985) `Saturn deal is bad for unions' . In These Times, 23-29 October: 11 . Perrons, D . (1981) `The Role of Ireland in the New International Division of Labour : a Proposed Framework for Analysis' . Regional Studies 15(2) : 81-100 . Piore, M . J . & Sabel, C . F . (1984) The Second Industrial Divide : Possibilities for Prosperity . New York, NY : Basic Books . Sawyer, K . (1985) `How People From Saturn Landed in Tennessee' . Washington Post National Weekly Edition . 19 August : 21 . Smith, D . (1985) `The missing "Q" in Saturn Q&A' . WARD'S Auto World, September: 45 . Tolliday, S . & Zeitlin, J . (1986) The Automobile Industry and its Workers: Between Fordism and Flexibility . Cambridge : Polity Press/Basil Blackwell . Tweeten, L . & Brinkman, G . L . (1976) Micropolitan Development . Aimes, IA : Iowa State University Press . USA Today (1985) `Governors court Saturn on TV' . 25 February : 1B . Watts, H . D . (1981) The Branch Plant Economy : A Study of External Control . London : Longman, Green & Co . Winter, D . (1986a) 'High-tech's midlife crisis' . WARD'S Auto World, June : 33-36 . Winter, D . (1986b) `Computer culture clash' . WARD'S Auto World, August : 42-44 . Woods, C . (1986) `General Motors changes models' . Management Today, January : 56-63 . Young, K .H . & Lawson, A .M . `Where Did All the New Jobs Come From?' in us Department of Commerce . PP . 29-39 in us Industrial Outlook, Washington, DC : us Government Printing Office .

Andrew Friedman

Developing the managerial strategies approach to the labour process • ANALYSES OF the labour process featured prominently in the first issue of Capital & Class . Arguably this journal was launched on a wave of enthusiasm for such analysis which Braverman's work (1974) generated at the 1976 Conference of Socialist Economists . In that issue I introduced a framework for analysing the labour process which emphasised managerial strategies and the effects of worker resistance and market factors on those strategies (Friedman, 1977a) . At the heart of the framework was the proposition that all labour processes could be usefully analysed beginning with an identification of which of two types of strategies top managers were being pushed to pursue, Responsible Autonomy or Direct Control . Since then this analysis has been criticised on a number of grounds . Perhaps the most important criticism has been the charge that too much rests on a simple dichotomy . Management groups rarely pursue `pure' strategies . If the same group of managers pursue different strategies at the same time, for the same group of workers, the value of proposing a few simple and clear strategies is surely severely reduced? In this paper I will attempt to deal with this and other criticisms of the framework which have been expressed over the past 10 years, rather than present a general view of labour process analysis, which has been done well elsewhere (Thompson, 1983) . I wish to develop the case for the managerial strategies framework based on that first Capital & Class article . The value

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of this framework lies in its political as well as its analytical consequences . To base the labour process analysis on several strategies which managers are pushed to pursue, at least in part pushed by worker resistance, allows us to identify and to analyse incidents of worker success . At the deepest political level it is the lack of theoretical categories which allow this possibility to be analysed that remains my strongest criticism not only of Braverman, but also of many of the successor frameworks inspired by Braverman . Reading Braverman (1974), the Brighton Labour Process Group (1977), Edwards (1979) or Burawoy (1979) for example leaves one with the impression that `capital' always wins and, more important, that capital will always win in future (until the day of the revolution) . I Obviously in the absence of a revolution we must conclude that capital has `won' . However, to begin with the question, why has capital survived for so long, or as Burawoy puts it, `Why do workers work as hard as they do?' has tended to produce analytical frameworks which allow no space for managerial failure . This denigrates all resistance which does not lead to a revolution and contributes to the schism between Marxian theory and concrete struggle . In this paper I will be concentrating on the managerial struggles element of the framework . After a brief statement outlining what will be referred to as the RA/DC (Responsible Autonomy/Direct Control) approach, various criticisms of it will be discussed . I will argue that several of these criticisms are based on misunderstandings of the approach . However, others are, I believe, well founded . I will argue that these latter criticisms can be accommodated by further developing the framework, rather than by severely modifying or rejecting it . Appropriate developments of the RA/DC approach will be presented with illustrations from the labour process of computer specialists . The RA/Dc approach

When managers buy workers' capacity to work (labour power), they buy a peculiar sort of commodity . Labour capacity is peculiar for two reasons : first, workers are particularly malleable, you can get somebody to do something once employed beyond what may have been specified in the original employment contract . Second, workers are ultimately controlled by an independent and often hostile will . These two peculiarities of labour capacity occasion two types of strategies which top managers pursue for maintaining authority over workers . In the first type of strategy, what I call the Responsible Autonomy type, managers try to accentuate the positive peculiar aspect of labour capacity, its malleability . Workers are given responsibility, status, light supervision, and their loyalty towards the firm is solicited by encouraging venom against competitors, by fancy sports facilities, by co-opting trade

Labour process

union leaders, etc . In the second type of strategy, what I call the Direct Control type of strategy, top managers try to reduce the amount of responsibility on each individual worker by close supervision, and by setting out in advance and in great detail the specific tasks individual workers are to do . Both types of managerial strategies have serious contradictions . These limitations stem from their common aim, to maintain and extend managerial authority over people who are essentially free and independent, but who have alienated (sold) their labour capacity . Ultimately, the direct control type of strategy treats workers as though they were machines, assuming they can be forced by financial circumstances or close supervision, to give up control over what they do for most of their waking hours . Ultimately, the responsible autonomy type strategy treats workers as though they were not alienated from their labour capacity by trying to convince them that the aims of top managers are their own . Both types of strategy involve a contradiction . People do have independent and often hostile wills which cannot be destroyed, and the aim of top managers ultimately is to make steady and high profits, rather than to tend to their workers' needs . Management is an active process . To maintain stable and high profits requires continual reorganisation of systems of coordination and lines of authority in response to changes required by fresh worker resistnace, new technologies, and other types of competitive challenges . But once any type of managerial strategy is implemented, it cannot be changed radically within a short period of time . Direct control strategies require well-defined lines of authority and a high proportion of white-collar staff . Responsible autonomy strategies may require an elaborate ideological structure for co-opting workers' leaders and the rank and file themselves, as well as relative employment security . To switch suddenly from a strong responsible autonomy strategy to a direct control strategy, or the other way round, would cause severe disruptions . Besides the difficulty of changing strategies quickly, each type of managerial strategy appears to generate its own peculiar form of inflexibility . With a high degree of direct control managers will find it relatively difficult to move workers around factories or to change their methods in response to machine faults, mistakes in co-ordination, changing techniques or changing product demand . Each change will require complex and time-consuming planning, communication and implementation of new detailed work tasks . Also the poor quality of working life for those under strict control will encourage resistance to management . With a high degree of responsible autonomy top managers will find it difficult to fire workers or to replace workers' skills and impose

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direct control with new machinery, without undermining the ideological structure upon which responsible autonomy is founded . One way of alleviating these inflexibilities is to divide the labour force into at least two different groups, central and peripheral workers . Responsible autonomy types of strategies would be used with central workers, direct control types with peripheral workers . This would not remove contradictions inherent in the managerial strategies, however it could reduce the inflexibilities generated with each strategy . Laying off peripheral workers only during recessions allows labour costs to be reduced while still protecting the employment security of central workers . Worker resistance to direct control types of strategies will be less significant if peripheral workers are poorly organised . This is easier to achieve if divisions between central and peripheral workers coincide with racial, sexual and geographic cleavages already existing among workers . Criticisms of the RA/DC approach

The wide range of criticisms of the RA/DC approach may be summarised under the following seven headings .

Simple dichotomy The most common criticism is that the approach rests on a simple dichotomy (Nichols, 1980 : 276 ; Littler, 1982 : 3 ; Wood & Kelly, 1982 : 84-85 ; Thompson, 1983 : 143 ; Gospel, 1983 : 12 ; Manwaring & Wood, 1985 : 186 ; Rose & Jones, 1985 : 84-86) . It therefore collapses the wide ranging repertoire of management practices into essentially two, Taylorist and non-Taylorist ones (Nichols, 1980 : 276) . The simple Taylorist versus work humanisation dichotomy is too limited (Manwaring & Wood, 1985 : 186) . It draws attention away from the historically specific problems and outcomes which have confronted management over time and from the mix of strategies with which they have experimented (Gospel, 1983 : 12) . According to Wood and Kelly, what is needed is a more elaborate conception of management practices which allows us to recognise shifts in managerial objectives, connections between practices and different forms which a single practice or set of practices such as Taylorism, may assume under different conditions (1982 : 84-85) . A number of critics have offered concrete suggestions as to how to move beyond simple dichotomy . According to Thompson, direct control and responsible autonomy are best seen as opposite ends of a continuum of practices rather than as all-encompassing strategies (1983 : 143 ; see also Rose & Jones, 1985 : 91) . Also it would be better to consider differences in management prac-

Labour process tices in terms of explicitly examining dimensions of control (Thompson, 1983 : 152) . Littler is also of this opinion, suggesting a consideration of three different `levels of structuration of work organisation' : job design, structures of control and the employment relationship' (1982 : 42) . Rose and Jones suggest that consideration of the distinction between management strategies for organising work and strategies for organising industrial relations is essential (1985 : 82) . A further set of suggestions to allow for a wider variety of practices is that different groupings of agents should be explicitly recognised as pursuing different strategies and different goals . Rose and Jones point out that the problem of integrating strategic decisions among management groups differentiated both vertically (in terms of the management hierarchy) and horizontally (in terms of different functions) suggests a degree of complexity to management practices which ought to be considered (1985 : 90) . Similarly Zeitlin criticises the inadequate attention to distinctive forms of worker resistance specific to different categories of workers (craftsmen, workers with plant-specific skills, casual labour) and different levels of resistance among various groups of workers (1978 : 103) . Coincidence of supposedly incongruent strategies Responsible autonomy and direct control may each be pursued at the same time . Braverman's position was that certain techniques (which I have associated with responsible autonomy strategies) go hand-in-hand with Taylorist work design . These techniques are simply a sop, a lever, used by managers in order to get workers to accept the essential Taylorist forms of work organisation . This position has been echoed by several critics of RA/DC . 'Friedman conflates the primary site of real subsumption (the labour process - Braverman's main concern) with the managerial strategies which are designed to secure this subsumption' (Schwarz, 1978 : 12 ; see also Zimbalist, 1979 : xxi ; and Wood & Kelly, 1982 : 79 and 84) . Real subsumption is compatible with a number of distinct managerial practices including reforms such as job enlargement, enrichment and worker participation according to Schwarz . Attention should focus on subsumption and the forms of securing subsumption, rather than on separating out managerialist categories . The inadequate history of capitalist development Schwarz criticises the RA/DC framework for not providing an alternative conception of monopoly capitalism to those of Lenin

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or Baran and Sweezy (1978 : 1-2) . One may go even further and claim a weakness of the framework to be that it does not identify peculiarly capitalist forms of subsumption, as well as not demonstrating how those forms have changed during the development of capitalism . As Thompson notes, Edwards (1979) has more comprehensively provided an analysis of the varieties of control inside the historical development of the capitalist labour process (1983 : 144) . Over-rationalisation of managerial behaviour Analysis in terms of managerial strategies gives a mistaken impression of consciousness, coherence, long-run perspectives, rationality and even omniscience (Wood, 1982 : 16) on the part of management, particularly in large organisations (Rose & Jones, 1985 : 87-89) . In so doing the framework ignores the short-run, reactive aspects of mangement behaviour . Also even when top managers formulate clear policies, what is implemented is often very different from what was intended because different managers and management groups pursue their own interests . This leads to a more general criticism of the RA/DC framework . The problem is that various forms and levels of control are not explained in their own terms . Instead, various features of British enterprise organisation, work group autonomy and bargaining relationships are mistaken for subsidiary elements of the overriding strategy of `control' (Rose & Jones, 1985 : 90) . This leads to different aspects of industrial relations practices being presented in `an instrumentalist fashion ; as institutions which can be developed and discarded as and when the dictates of a control strategy require' . According to Rose and Jones this adds an unnecessary teleological element into the analysis . 'Practices arising within firms may not have arisen as expressions of a strategy, but rather as only contingently related decisions arising from different short-term or localised pressures' (1985 : 90) . Definition ambiguity According to Wood and Kelly there are three different definitions of responsible autonomy presented in Friedman 1977a and 1977b . (i) worker discretion and commitment to capitalist objectives, supposedly the result of job-redesign practices . (ii) counselling, improvements in social relations, the stimulation of intergroup competition, suggestion schemes and par-

Labour process ticipation, supposedly elements of human relations practices . (iii) the concession of improved material benefits - high wages and incentives, job security, good fringe benefits and working conditions . Direct control is also criticised as ambiguously described, sometimes as Taylorism, other times as an effort to limit the variable effects of labour power . Wood and Kelly argue that these practices often will not coincide . Therefore strategies or even tactics should not be defined in terms of techniques (1982 : 82-83) . Later Kelly goes even further, stating that the problem with the RA/DC framework is that `the terms of this typology can be taken too seriously and used as descriptive categories to describe "real" managerial practices, rather than ideal-typical categories' (1985 : 39) . A related, though seemingly directly contrary criticism to this is that the RA/DC framework does not `grapple with the factory floor routines where industrial relations are actually worked out' (Roberts, 1978 : 581) . Here the mangement strategies framework is being criticised for not attempting to relate to actual practice, rather than mistakenly doing so . Mistaken interpretation of the effects of management practices By taking particular technique-based definitions of the strategies, several have criticised the RA/DC framework for then mistakenly accepting the interpretation of those techniques which is offered by their creators and champions (Wood & Kelly, 1982 : 83) . For example, Ramway criticises the interpretation of job enrichment schemes as responsible autonomy types of strategies because job enrichment schemes generally do not actually result in higher worker satisfaction (1985 : 64-65) . Similarly Schwarz criticises responsible autonomy because it appears to imply accepting managerial ideology that practices based on industrial psychology or industrial sociology can provide an alternative to the subordination of the worker (1978 : 11) . Overemphasis of labour practices and control functions of management This criticism has been aimed at all the labour process literature as well as the RA/DC framework . The literature overemphasises factors internal to organisations . The surplus value producing process cannot be reduced to the labour practices of management and the immediate issue of control of labour power . Even the issue of control over the labour process requires explanation of practices and ideologies outside those directly initiated by capital within the labour process . Levels of analysis relating for

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example to attempts through the state to smash trade unions or to incorporate them through legislation are neglected (Nichols, 1980 : 272 and 276 ; see also Rose & Jones, 1985 : 101) . Control over the labour process is only one of three equally important functions for capitalist managers according to Wood and Kelly, the others being the maximum extraction of surplus value and the realisation of surplus value . It is possible to have high labour exploitation but weak control, for example (1982 : 77) . Problems with any of these functions can lead to labour process changes of the sort attributed to the control function or to struggle over that function . Wood and Kelly's major example of this is the contradiction between mass production techniques geared toward standardised products which was developed in the consumer durables industries during the 1920s and 1930s, and the growth in product ranges necessitated by the growing diversity of consumer demands which these manufacturers had to serve during the 1950s period of widening domestic and international markets . To resolve this contradiction managers developed a number of strategies including product obsolescence, production swapping among manufacturers, forcing distributors to order larger amounts and production reorganisation. The latter strategy involved reducing emphasis on assembly lines . Though it was represented in the management literature as a concern for job enrichment, its origins `had less to do with under-utilised and bored workers than with overstretched production systems' (1982 : 86) . This criticism has been repeated or cited in several places (Thompson, 1983 : 105 ; Manwaring & Wood, 1985 ; Kelly, 1985 ; Blackburn, Coombs & Green, 1985 : 111-114) . Responses to the criticisms

The range of criticisms of the RA/DC framework requires a variety of responses . In the following sections I will make three sorts of responses in turn . First, some criticisms I accept and appreciate as stimuli to develop the framework further . Second, I believe that certain criticisms are based on misunderstandings of the framework . Finally there are straightforward disagreements over the appropriate site of analysis and the tools to be used .

Response one : developing the framework

Interpreting the simple dichotomy criticism as a call to consider different dimensions of control or the activities of different groups and levels of managers and workers is not incompatible with the RA/DC framework . The framework does not, by itself, provide an adequate theory of management practice . Rather it concerns the interpretation of certain management practices in a way which allows the influence of worker resistance and environmental changes to be analysed . A weakness of the RA/DC framework has

Labour process been the inadequate specification of the relation between strategies and concrete practices . One way to do this is to specify different types of practices and then to clarify the RA/DC dimensions which are articulated in those types of practices . Management practices and strategic dimensions Before proceeding to discuss the relation between management practices and strategies a number of related terms which are used below need to be specified . The term management practices will be used to indicate the forms of management activities which are actually observed . Management initiatives concern the forms of activities which managers attempt to implement . Finally management activities are the tasks which managers could carry out . Management of a capitalist labour process requires initiatives concerning many different activities . Different labour processes require different tasks . For example, some require handling volatile chemicals . Controlling the physical environment becomes a major activity which is unnecessary for most other labour processes . Nevertheless, we can, at a fairly general level, distinguish categories of activities which are required in all labour processes . The following four will be distinguished : task organisation, control structure, labour market relations and lateral relations . This is not intended to be an exhaustive list . The choice of categories is guided by my interest in work organisation and industrial relations in data processing departments . The categories chosen are managerial activities through which the strategies toward maintaining authority are most clearly articulated in this particular labour process . Other activities could have been chosen, such as supplier relations, physical environment design or perhaps the one which Rose and Jones feature, industrial relations procedures . In different labour processes such activities may be particularly important, meaning that they have been the subject of struggle or that they have required considerable managerial energy and resources . The relation among strategies, activities and practices is complex . Two different linking concepts are necessary . First is the concept of managerial energy, attention or effort . In the long run, management must deal with an extremely large number of tasks . Many are dealt with in a routine and perfunctory manner in any short period of time, because they do not `slip' . For example, the physical plant is rented . At that time considerable effort may have gone into assessing and carrying out repairs, renovation and re-design . Once carried out, much of this aspect of managerial work can be ignored at little cost . Also, at the time of plant renovation, clear and routine maintenance procedures

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may be established . These may be sufficient to allow higher level managers to ignore this category of activities . Other activities require more frequent attention . The structure of control, for example, is more likely to be affected adversely by external conditions, such as changes in labour legislation or changes in the particular stock of workers to be controlled . Also the structure of control is more likely to generate problems for management (lowering worker effort or generating more active resistance) as part of its normal operation because it relates more closely to the basic dynamic and contradictory aspects of the labour process . Therefore deterioration of the control structure, in the sense of aspects of the control structure lowering profits, is more likely in the short run . This, in turn, pushes management to expend more effort on these activities within any particular period of time . The sorts of managerial activity which are characterised by rapid deterioration and high managerial attention are the ones which are more likely to express the most recent strategic position of top managers on the Direct Control/Responsible Autonomy continuum (contingent on two further conditions discussed below) . Which activities these are will differe in different organisations and over time, though some activities will generally be more prone to deterioration - those closely connected to markets or those closely connected to the fundamental problem of control . A second consideration for linking activities and practices with strategies relates to the general, extra-organisation level . At different times the activities which achieve more managerial attention will be influenced by managerial fashion, union activity at a national level or wider political debates . Employee participation schemes and health and safety conditions (particularly associated with dangerous substances such as asbestos) are examples of themes which descend from wider societal context to stimulate managerial effort toward particular activities . The role of the state is particularly important here . Finally some management activities are, by their nature, closely associated with work organisation and industrial relations . Control structure and labour market relations are ceteris parabus the two most closely associated categories of activities . Activities are simply the tasks of management . They are the plane or field on which strategic initiatives, resistance and countermoves are played out (or fought) . 2 Within each category of activities there exists a wide range of choices as to how to carry out each individual activity, a wide range of possible management initiatives . These choices will be influenced by top management's basic strategy toward labour . However, this does not mean that we can determine which strategy is being pursued by looking at the particular choice made in any one of these activi-

Labour process

ties . The range of choices for designing each activity can, at best, only be treated as an imperfect microcosm of the range of choices for designing the entire set of activities . This is because each management practice will have only a variable ability to reflect the current Responsible Autonomy/Direct Control strategic position because of different degrees of managerial effort expended on each activity, the influence of extra-organisation fashion and techniques, the degree to which the activity is associated with overall work organisation and industrial relations and, of course, the problems of implementation . This leaves us with a formidable problem . Even if we can decide how to value each possible choice on the design of any one activity according to its position on a Responsible Autonomy/ Direct Control continuum, how can we further decide on the relative importance of weighting of the score on that activity for an overall adjudication of strategic position? The answer is, I believe, to consider certain dimensions of Responsible Autonomy/ Direct Control which are peculiar to categories of activities . Categories of activities, their strategic dimensions and an indication of their relevance to the labour process of systems development in data processing departments are summarised in Figure 1. Distinguishing categories of activities from activities is rather arbitrary . There is a range or continuum of ways of describing activities from the most general and wide to the most specific and narrow . It is quite acceptable, I believe, to use categories which have some currency in the management literature . However detailed research of practising management groups and workers obviously can provide a more appropriate set of categories . This is an area which requires more research . The general types of strategies, Responsible Autonomy and Direct Control, are only of interest if they are expressed through concrete managerial initiatives . These initiatives are reflected in certain choices which are open to managers concerning the design of activities . The choices will sometimes be perceived as a simple dichotomy, though most often a range of task organisation design options will be available . These options will have varying degrees of specificity to the particular labour process being considered, but they may be mapped or translated into dimensions which clearly reflect the Responsible Autonomy/Direct Control strategic framework . Examples of this translation are given below . Task organisation and computer specialists

Consider the task organisation category of activities to be designed for the work of systems developers in the data processing

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Figure 1 : Management strategies and activities: data processing departments Strategies

Responsible autonomy - direct control

Categories of activities

Task organisation

Control structure

Lateral relations

Subcategories of activities

types and form of inputs

Layers of control

Method of transformation Scheduling and organisation structure

- instruction and direction - monitor

Structuring communications Charting the individual's among workers progress through the firm :

Tools and machinery available

evaluate and reward (punish) Phases of control initiation process

Strategic dimensions

at levels of :

Recruitment

small groups

Training

between departments of similar function

Promotion Separations

departments of different functions

results

with customers and suppliers

task length

degree of detail

degree of communication

task variety

degree of formality

task originality

monitor - people or work

human vs non-human forms employment protection of individuals cooperative vs competitive relations

evaluate by reward vs punish Techniques in data processing departments

Labour market relations

division of labour between analysts and programmers structured methodologies packages and fourth generation languages pools vs teams

dependency on particular staff

milestones

development team meetings training courses

worksheets structured walkthroughs

users meetings locking of the operations room

quality assurance teams specification detail

company cars egoless programming special job ladders and perks to computing staff

Labour process

department of some large firm in the engineering sector . The work may be organised in several ways . Programmers can be organised in a pool where requests for coding come to them as rather small, discrete tasks which are well specified . Programmers can also be organised into teams to work on large problems together . Given the same size of project we would expect the programming work to be less strictly divided up before the work is given to the programmer in the project team structure compared with the pool structure . On the other hand, programmers may be combined with analysts in a project team which accepts much larger tasks and works together on a much larger collection of the jobs required in the system development labour process . Even with a project team organisation structure there are further choices available . For example, does the team stay together once a particular project has been completed, do individuals belong to more than one team at a time, does the team work on more than one project at a time? Consider a further example, the actual working procedures of computer programming . This entails transforming a detailed specification into a computer programme . There are a wide range of choices concerning the computer language to be used . The choice is not simply : use COBOL or ASSEMBLER or BASIC . Once the formal language is chosen there are still decisions concerning the structure of the final programme - should it be broken into smaller sections (modules) and how independent should these modules be? Should any statement in the language be used or should some statements be avoided (such as GOTO statements)? Does the programmer have to specify where the data to be analysed is to be found and the procedures for entering it into the programme, or will this be carried out (semi) automatically by a piece of software in the programmers' environment (the database management system)? Here we have two sorts of activities within the general category of Task Organisation, that is, organisation structure and working procedures . Each activity can be carried out by a range of particular structures, techniques or technologies . The particular choices made will, I believe, be influenced by the basic strategy of management toward labour . The particular organisation structure chosen will have fairly clear consequences on the size of tasks programmers are likely to be given, on the variety of those tasks and on the skill requirements for carrying out those tasks . In general we suspect that organisation structures which separate programmers from each other (programming pool structure) and those which strictly separate programmers from analysts, whether in pools or project

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teams, are more likely to reduce size and variety of programmer tasks . Size and variety of tasks are not, by themselves, adequate indicators of overall management strategies toward labour . Nevertheless, they are an important component of many types of managerial strategies . They are dimensions of Responsible Autonomy/Direct Control which are quite clearly reflected in Task Organisation choices . While managers may not always have such dimensions uppermost in their minds when choosing an organisation structure, at certain times the consequences of their choices for this Responsible Autonomy/Direct Control dimension will become more obvious through the basic contradictions of each strategy . Each type of strategy has its own characteristic consequences on industrial relations . For example, the task organisation aspects of Direct Control strategies encourage boredom, reduced worker effort, labour turnover and, possibly, more overt forms of collective worker resistance . Responsible Autonomy strategies encourage demands for further concessions on the part of workers and make it difficult to fire individual workers . In time, as the pattern of industrial relations is shaped by internally and externally generated stimuli, the particular strategic position on this RA/DC dimension implied by organisation structure choices will stimulate an awareness on the part of managers of the RA/DC consequences of their choices, even if the choices were not made with the size and variety of tasks dimension in mind . Similarly, the choice of technique for transforming a detailed specification into a programme of whatever length will have consequences on the complexity, originality and type of knowledge required of the programming work . Often managers will choose techniques with these strategic dimensions in mind . Structured programming in particular was a technique developed specifically to reduce the originality of programming work, to make the finished programme more easily understandable to others . The developers of this technique specifically mention these advantages in their promotional literature (Jackson, 1975 ; Yourden & Constantine, 1979) . On the other hand, the use of techniques such as the computing language, COBOL, have les clear consequences on task organisation strategic dimensions and are likely to have been adopted because of fashion or the existence of other tools and techniques founded on COBOL . Which strategic dimensions particularly relate to Task Organisation? The following three dimensions seem to be appropriate : task variety, task length and task originality . Littler (1982) considers two dimensions to what he calls work design as important, task range and task discretion . Our dimensions of task variety and task length may be thought of as subsumed in

Labour process Littler's task range . It may be that a worker is given a wide range or considerable variety of work to carry out, but that most individual tasks are boring . Requiring workers to perform a wide range of short tasks is very different from giving them a wide range of tasks of very different lengths . The rhythm of work can be an important factor relating to worker satisfaction as well as ease of control over workers . Littler's category of worker discretion properly belongs to his category of Control Structure . His refusal to explicitly consider the strategic dimensions of the labour process leads him to confuse what we have separately called mangement activities and dimensions of management strategies . Task discretion is a strategic dimension . The degree of discretion a worker is allowd over which tasks to carry out and in what order depends on the degree of direct control managers try to exert . Task range, on the other hand, is a characteristic of task organisation . Task originality is clearly a property of work design . The neglect of such a dimension in the labour process literature stems largely from an overemphasis on manual work . Of course even with the most common manual labour processes analysed (such as production line car workers), a degree of originality can occur when new models are introduced or when uncommon errors are made further up the line . Originality of task is a relative term . Originality can be considered in relation to the labour process in general - such as a computer department developing an entirely new system - one which has not been attempted elsewhere . Originality may also be considered in relation to the particular organisation studied, such as the first real time computer system developed in that computer installation . Finally, originality may be considered in relation to the particular worker to carry out the task - task elements which are new to that person . Once we appreciate the frequent and continual nature of technical change in most labour processes, originality of tasks becomes a strategic dimension which is not isolated to a few professional or scientific workers in research organisations . Lateral relations and computer specialists In the computing world lateral relations have become an important site of management initiative . Lateral relations concern the encouraging, discouraging and structuring of communication among workers . by this I do not mean the delegation of control activities from top managers to low level staff . That belongs to the Control Structure Category . Rather it is the form and character of communication among workers of similar status or of different status, but with no clear authority relation between

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them . Communication among workers within a work group or between people in different departments are examples of such lateral relations . The key strategic dimensions concerning lateral relations are : a) whether lateral relations are encouraged to take a human or a non-human form ; and b) whether the spirit of lateral relations is cooperation or competition . Whether the Control Structure takes a human or non-human form is not a strong strategic indicator. Supervision can be very detailed and direct in a personal form, as Taylor so graphically demonstrated in his example of Schmidt, the pig iron loader (Taylor, 1911) . Lateral relations in a personal form, on the other hand, are more likely to be a technique of achieving a Responsible Autonomy type of strategy . The Direct Control type of strategy in this category of activities is guided by the attempt to isolate individual workers from their co-workers . This process has been called `individuation' of work by Mulcahy and Faulkner (1977 and 1979) . `It denotes a work process in which people are separated from one another and there is an absence of structured interpersonal relations on the job, save for those of a most superficial sort' (1979 : 228) . The overall pattern of lateral relations in Mulcahy and Faulkner's study was directly controlled through the process of work individuation . Nevertheless, the few human contacts remaining were not structured by managers directly . The result was that such relations gave rise to conflict . Conflict among groups of workers is not necessarily an indication of management failure . Quite the contrary some believe . Burawoy (1979), examining a similar work situation, interprets conflicts between machine operators and ancillary workers (such as stockmen, and maintenance workers) as a clear management ploy to displace workers' frustrations and anger with managers onto fellow workers . Lateral relations among white-collar workers are often much more structured by management . In computer departments programming work is usually carried out in teams . Many managers explicitly eschew individuation by trying to get programmers to work together, to check each others' code internally and to discuss procedures . To achieve 'egoless programming' is a stated aim of many computer managers (Weinberg, 1971 ; Friedman & Greenbaum, 1984) . To say that lateral relations are structured is not to say that they are directly controlled . They can be structured with a Responsible Autonomy strategy in mind . Lateral relations is a category of activities neglected by many managers . Often when they receive attention, it is by managers who lean towards a Responsible Autonomy strategy . This is because positive initiatives in these activities often mean dealing with workers



Labour process

with respect to their peculiarly human characteristics, their ability to communicate meaningfully . This can, of course, be a great advantage to management, but to be turned to management's advantage requires more than simply ordering it to be so . This is, to some extent, the key problem area for computer managers at the moment with respect of lateral relations between computer staff and computer users . To improve relations with users, computer managers have initiated a wide range of activity changes ncluding changing internal recruitment policies and altering task organisation as well as bringing users into the system development process (Friedman & Cornford, 1985) . Strategies and techniques and management practices

A second major criticism of the RA/DC approach which I accept is that it has suffered from definition ambiguity . Unfortunately management practices or techniques which have been presented as examples of expressions of one or other of the types of strategies, has been mistaken for a definition of either responsible autonomy or direct control . Taylorism is not direct control . Job redesign or human relations practices are not responsible autonomy . Rather the introduction of management initiatives and actual practices which are associated with say the human relations school of management are likely to represent moves toward responsible autonomy. However, the separation between practices and strategies becomes clear when examples of human relations practices may be found in situations where they clearly represent moves in the opposite strategic direction, toward direct control . For example, in 1975 Chrysler UK offered its workers a participation plan which allowed for selected worker representation at management levels within the UK . The scheme was quickly and resoundingly rejected by the Chrysler labour force . Normally, the introduction of a participation scheme can be taken as evidence for moves toward responsible autonomy by management . This participation scheme was announced in the midst of a series of tough measures Chrysler was introducing to cope with the recession in the UK car industry . On the surface this situation appeared to be a straightforward example of Braverman's hypothesised use of human relations techniques as a sop to sweeten the bitter pills of Taylorist working procedures and casualisation of the labour force, the `real' changes occurring in the labour process . Similarly the change might have been interpreted as a broad move toward direct control considering the balance across many relevant categories of management activities, in spite of the move toward responsible autonomy in the category of industrial relations proC~Ic

'I. ,

Id

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cedures . However, a participation scheme offered to poorlyorganised workers with weak collective bargaining procedures should not be interpreted in the same way as a scheme offered to highly-organised workers with strong grass-roots collective bargaining procedures . At Chrysler, as in much of the rest of the car industry, top managers had been explicitly trying to reduce the bargaining role of ordinary shop stewards since the late 1960s . The worker participation scheme was viewed as another attempt to reduce the power of ordinary shop stewards . The rejection of this scheme by the rank and file and shop stewards at Chrysler should not be interpreted simply as a `canny' reaction by workers in the context of clear moves by management toward direct control in other categories of management activities . Instead it was a straightforward, rational response to a retreat from responsible autonomy in the narrow context of industrial relations procedures . The participation plan represented attempts to effect the removal of `participation' in decision-making through collective bargaining which thousands of shop-floor workers and ordinary shop stewards had enjoyed . This was to be undermined and eventually replaced by `participation' in decision-making through consultative committees by a much smaller number of senior shop stewards and selected worker representatives (see Friedman, 1977b : 226237) . I certainly agree with Wood and Kelly and with Rose and Jones and it is important not to confuse management strategies or even tactics with techniques . Some of the criticisms of RA/DC which are based on misunderstandings of the approach may be attributed to a failure to appreciate the distinction between strategies and techniques . Neglect of extra-organisation levels of analysis While it is acceptable to concentrate on internal organisation issues in terms of what one primarily wishes to understand or explain, it is not acceptable to explain those issues only by factors which are internal to organisations . Some labour process writers can be justifiably criticised for this . There is a desire among many labour process writers to introduce class struggle at the shop floor level as a potent factor stimulating real changes in internal organisation practices as a corrective to traditional Marxist and bourgeois social theory . This had led certain labour process writers to concentrate on cases where they believe they can show that actual changes in the labour process have occurred which are contrary to an overall logic of capital or considerations of economic efficiency or technological necessity (Marglin, 1974 ; Noble, 1979 ;

Labour process Wilkinson, 1983). Perhaps some have overstated their case . Nevertheless, allowing for cases where outcomes within organisations may be primarily attributable to shop floor politics does not, by itself, deny a relationship between extra-organisation factors and organisation outcomes . However, as Blackburn, Coombs and Green argue, one needs to explore in a systematic way the relation between `the macro-level structural conditions of capital accumulation (market, competition, product change) and the micro-level interactional arena of shop floor negotiation in particular firms' (1985 : 113-114) . This is precisely the relation which the RA/DC framework was intended to analyse . There is one set of extra-organisational factors which was not examined sufficiently in Industry and Labour . I agree with Nichols that class struggle at national and international levels has been neglected in the RA/DC framework . Again it is not impossible to incorporate these levels into the analysis . One can conceive of political parties, governments and other state apparatuses as champions of movement toward responsible autonomy (higher education institutions, left wing of the Labour Party, Liberal Party) or toward direct control (the military, Thatcherite wing of the Conservative Party) . Dominic Strinati's analysis of the tension between corporation and what he calls authoritarian populism at the national political level bears strong similarities with the RA/DC dichotomy (Strinati, 1985) . Linking these two levels would, I believe, strengthen both analytical frameworks . Simple dichotomy Response two : Certain versions of the simple dichotomy criticism are, I Misunderbelieve, unjustified . Responsible autonomy and direct control standings of the were conceived as a kind of continuum indicating two directions framework towards which managers can move, rather than two predefined states between which managers choose . There is, therefore, a wide range of possible positions between extreme forms of responsible autonomy and direct control, as well as different paths leading in each direction . This is the way they were conceived in Industry and Labour (107), and the point has been reiterated since (Friedman, 1984 : 181), though Nichols (1980 : 276) and Thompson (1983 : 143), in particular appear to have ignored this point . A second response to the simple dichotomy criticism relates to the interpretation of the endpoints of the continuum . The dichotomy is not between Taylorist and non-Taylorist practices or Taylorism versus work humanisation . Taylorism was simply considered as one of the types of direct control strategies pursued . It was featured because of the clarity with which Taylor enunci-

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ated scientific management . This confusion arises because of the lack of clear distinction between individual techniques or management practices, and their strategic interpretation in Industry and Labour (see 5 .2) . In response to the criticism that a simple dichotomy is inadequate because different groups of agents ought to be explicitly considered, I would note that the framework was designed to explain broad changes in managerial strategies at the organisation and industry level . Therefore, the agents most explicitly considered were top managers . They are most important because of their roles as formulators of broad policies and because of their power to regulate formal implementation and informal practices through disciplinary actions against managers lower down the hierarchy . However, when examining concrete outcomes it is necessary to examine the activities of all agents and groups directly or indirectly involved in the labour process . Nevertheless, the RA/DC framework can be applied to different managers and management groups . In fact, we may expect systematic differences in strategies pursued by different management groups when external and internal factors exert opposing influences on management strategies . For example, lower level managers will be more sensitive to shop floor worker resistance . Top managers and sales managers will be more sensitive to product market conditions . Personnel managers and lower level line managers will be more sensitive to labour market conditions . A classic `uncoupling' of strategies toward computer programmers regularly occurs in the UK manufacturing sector . There product markets have been subject to weak demand and growing foreign competition since the 1960s . This makes top managers highly cost-conscious and anxious to reduce labour costs . They are pushed toward direct control strategies . However, there has been a continual shortage of computer programmers during this time . This encourages data processing managers to implement initiatives designed to retain good staff. It encourages responsible autonomy strategies toward computer personnel . As a result data processing managers are often forced into an impossible situation . A standard method for `tightening up' in the data processing department is to fire the data processing manager . An outsider who will be more sensitive to top managers' wishes is then brought in . Often this strategy only works in the short run . The new broom often `loosens up' once he or she begins to lose staff . Coincidence of incongruent strategies Considering the strategies to be articulated in a wide range of management practices within different categories of manage-

Labour process ment activities opens the possibility of analysing complex strategic positions (section 5 .1) . Because actual managers have limited energy and attention, we may expect changes in either strategic direction to be articulated in concrete management initiatives only after a substantial time lag . Furthermore these lags will differ for different activities because energy and attention requirements to change different management practices will differ . In part this will occur because different lower level managers must implement strategies designed in a broad sense by top managers . In part it will occur because of differential worker resistance to particular managerial initiatives . In part it will simply reflect different financial and physical resources required to make desired changee in management practices . However, such complications do not invalidate the RA/DC framework . Rather the framework may be used to help understand changes in management practice when supplemented with more detailed propositions concerning management practices .

Strategies and techniques and the development of capitalism Scharz's criticism that RA/DC fails to provide a coherent alternative theory of monopoly capitalism rests on a misunderstanding of the purpose of the strategic framework . The types of strategies were conceived of as common to all class-divided societies . Also some of the categories of activities are common to any labour process . Which particular strategies are pursued, which particular activities are emphasised, the degree of success managers achieve and the strength and character of worker resistance will change over time, but not in a monotonic cumulative fashion . The only cumulatively growing aspect of the model is the experiences of the labour process and these are reflected in the growing collection of available techniques . Even these do not increase cumulatively because some old techniques disappear, through lack of use, and may never be rediscovered . It is at this level that I believe Edwards's framework in Contested Terrain (1979) should be interpreted . His shifts from Simple (or Personal) control to Technical and Bureaucratic Control are not, as Edwards implies, changes toward deeper and complete management control over labour . Rather they are different technologies with respect to the Control Structure category of managerial activities . By themselves, they do not impose greater management control or coercion of labour . With each there is a range of possible strategic positions (in the Responsible Autonomy/Direct Control sense) and a range of possible degrees of success .

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Mistaken interpretation of the effects of management practices These criticisms seem to me to be clearly founded on confusions between strategies and techniques, and between strategies and success of strategies (or between strategies for subordination of labour and the degree of subordination of labour) . I have already pointed out that strategies do not coincide with techniques . Strategies also do not coincide with success of strategies . Just as the distinction between management initiatives and management practices must not be forgotten because implementation is not always successful . So the overall purpose of the strategies may not be achieved, even if managers succeed in implementing their initiatives . One obvious reason for possible failure of strategies is worker resistance . For example, top managers of British car firms hoped to achieve greater direct control over labour with the introduction of Measured Day Work . After serious struggle they did succeed in implementing the scheme . However, the result was not greater direct control . The critical rise in control over how fast workers would work was not achieved by management with the coming of Measured Day Work in the early 1970s (Friedman, 1977b : 234-246) . Similarly Ramsay is quite wrong to suggest that identifying job enrichment schemes with responsible autonomy strategies means that we would interpret such schemes as causing worker satisfaction to rise . The purpose of the schemes is not to increase worker satisfaction, but to maintain authority over workers . Furthermore, implementation of such schemes does not ensure success in this aim . Responsible autonomy as a management strategy is not an alternative to the subordination of the worker as Schwarz suggests (1978 : 11) . It is an alternative way in which managers try to achieve that subordination . Responsible autonomy strategies are clearly successfully implemented in data processing departments . In fact Mumford has reported that worker satisfaction is relatively high in this field (1972) . However, even this does not mean that these strategies are successful from management's point of view . Recruitment and labour turnover are still great problems for many data processing managers . The RA/DC framework differs fundamentally from frameworks proposed by many management theorists in that RA/DC is not prescriptive in the simple sense of proposing that one strategy will always be `better' or more successful than another . More than one strategy has been proposed to emphasise that there is no `One Best Way' to manage workers from managers' perspective . The choices are real choices . Sometimes one strategy will be appropriate, sometimes another . Which strategy ought to be

Labour process used, and the degree to which it is pursued, is not a simple matter . A key value of the management strategies approach is that it allows for management error . Strategies are about intentions which need not be coherent, conscious, constant or successful . Changing market conditions, technological possibilities or the heat of shop floor struggle may push managers to change their strategies . However, whether they move at all in the predicted direction, whether they move quickly or slowly, and whether such changes allow them to secure higher profits or to avoid substantial losses will depend crucially on options chosen in the past . Because of this strong interdependence across time, decisions to change overall managerial strategies toward workers may be viewed as long-run decisions .

119

Overemphasis of the control issue Certainly at times management will be primarily concerned with issues other than maintaining authority over workers . Furthermore initiatives in these other spheres will sometimes have important consequences for the organisation of work and industrial relations . Nevertheless strategies toward markets or technology will often be constrained by labour policies . Also, the consequences of strategies toward markets or technology on work issues will be mediated by the existing labour strategies (and of course the interaction of these strategies with worker resistance) . To deal with these issues several theoretical elements need to be explored . First, how do we classify market and technology strategies of managers? Second, how do these strategies interact with labour strategies? Third, under what circumstances would we expect labour strategies to dominate managerial initiatives, compared with other strategic considerations . Some of the issues have been dealt with above . I would agree with Wood and Kelly that certain labour process writers have confused labour control strategies with the ultimate aims of managers . Braverman (1974), Marglin (1974), Brighton Labour Process Group (1977) and Edwards (1979) are, I believe, particularly prone to this . I have criticised writers on deskilling for mistaking a strategy toward deskilling with the goals of managers (Friedman, 1981) .

Certain criticisms of the RA/DC approach are simply due to differences of opinion rather than misunderstandings or the underdevelopment of the approach .

Response three : Defending the framework

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Over-rationalisation of management behaviour What the managerial strategies framework does not imply is either that managers always hold a coherent and conscious set of policy rationales or that such policies are effectively followed through from strategic thinking to implementation . According to Rose and Jones (1985) anything which is claimed to be a managerial strategy should have these two characteristics (rationality or coherence and effective implementation) . I would agree with Child 91985) that these requirements are far too stringent for the concept of strategies to be useful . Certainly the degree of coherence and consciousness by which managers perceive strategies, and the problems top managers may have in getting their strategies implemented, particularly if middle managers are pursuing different strategies, are important issues which ought not to be assumed away . Nevertheless the way to deal with them is not to throw away the advantages of the strategic framework (such as the clear insistence on choice and a degree of consciousness effecting the outcomes of the complex labour process) just because the medium through which they are expressed is muddied with other considerations . According to the Oxford English Dictionary, strategy orginally simply meant the office or command of a, general or generalship. And one of the meanings now is simply the art of projecting and directing the larger military movements and operations of a campaign . Strategy is distinguished from tactic which is the mechanical movement of bodies set in motion by strategy . There is nothing in the definition to suggest that strategy can only be thought of as a coherent, rational and consistent activity . It would be a pity if we could not analyse a general's behaviour as guided by a strategy simply because the general occasionally lost sight of his own strategies or because some of his lieutenants were incompetent or had ideas of their own . It is also unduly restrictive to disallow inference of a strategy from an examination of the general's actions without a copy of his memoirs . This is not to imply that the general's consciousness does not matter, merely that describing the general's initiatives in terms of a general strategy is useful quite independent of the general's degree of consciousness of this strategy . Similarly, the problems of implementation or what Child calls the tightness of coupling between managerial intentions and their actual implementation should be treated as a variable factor, but one which does not destroy the utility of modelling those intentions in the first place . The link between managerial strategies and managerial consciousness can be described in another way. While managers may not have overall strategies in mind when they make particu-

Labour process lar choices as to how to organise the labour process, at certain times, the consequences of their choices will become more obvious through the basic contradictions of each strategy . Each type of strategy has its own characteristic consequence on industrial relations . For example, the task organisation aspects of Direct Control strategies encourage boredom, reduced worker effort, labour turnover and, possibly, more overt forms of collective worker resistance . Responsible Autonomy strategies encourage demands for further concessions on the part of workers and make it difficult to fire individual workers . In time, as the pattern of industrial relations is shaped by internally and externally generated stimuli, the particular strategic position on this RA/DC dimension implied by organisation structure choices will stimulate an awareness on the part of managers of the RA/DC consequences of their choices, even if the choices were not made with overall strategies toward labour in mind . Simple dichotomy: why only two strategies? Another interpretation of the simple dichotomy criticism is that RA/DC is `simple' because only two types of strategies are proposed . I wish to defend this simplicity . What the two strategies represent is what I believe to be the fundamental contradiction of the labour process in a class-divided society . There is always a fundamental tension between the need to gain cooperation or consent from those who do the work, and the need to force them to do things they do not wish to do, or to be treated in a way which is against their own interests, in order that the goals of those `in control' of the labour process be achieved . 3 This contradiction is fundamental to all class-divided societies . It can be expressed in general terms as a tension between treating people as one would treat oneself (hopefully a basic tenet of non-class divided societies, but often a strategic device in a class-divided society) and treating people as the `other' meaning other than oneself, perhaps, other than human . In those terms it is difficult to imagine (at least it is difficult for me to imagine), a number greater than two which makes sense, though we could further define `other' into others . What I believe distinguishes each mode of production is the characteristic conceptualisation of the other . The `other' associated with the capitalist mode of production is the commodification of labour, the treatment of people as no different from things, from other inputs into the labour process . In capitalist society as a whole there are different models of the `other', such as other than male, other than white or other than British . These can sometimes be used as strategic models in the labour process . In societies preceding the existence of well-developed labour

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(power) markets, different notions of other were more important as overall strategies to coordinate the treatment of the lower classes in the labour process . This fundamental dichotomy of the capitalist labour process has actually been alluded to by Littler in the following passage : The labour/labour power distinction implies that capitalism is in a perpetual tension between treating labour as a commodity and treating it as a non-commodity, that is as a continuing social relation between employer and workers (Littler, 1982 : 32) . This one way of expressing the RA/DC dichotomy which Littler explicitly suggests should be rejected because it is `simple' (1982 : 3) .

Notes

References

1 . Edwards allows that capitalists have failed in the past . Between 1900 and 1930 he points to Taylorism, welfarism and company unions as failed or only partially successful experiments . However, these were replaced by technical and bureaucratic control, forms which embed control into the structure of the labour process . Edwards gives little indication of their limitations, or examples of how such forms of control have, in fact, been overcome . In this his category of structural control resembles the Brighton Labour Process Group's use of the category real subordination, as a way of closing the possibility of effective shop floor resistance (see Friedman, 1981 for a criticism of the Brighton Labour Process Group paper along these lines) . 2. They are the terrain on which contests occur, to use Edwards' (1979) phrase, but they are not the goal itself . They are not what is fought over, merely the place of battle . 3. As I pointed out in Industry and Labour, it is important to distinguish between control as a relative concept in the sense of a frontier of control, and control in the sense of who makes the primary initiatives founded on a legal (or, at times, a moral) basis . Blackburn, P ., Coombs, R . & Green, K . (1985) Technology, Economic Growth and the Labour Process . London : Macmillan . Braverman, H . (1974) Labour and Monopoly Capitalism . New York : Monthly Review Press . Brighton Labour Process Group (1977) `The Capitalist Labour Process', Capital & Class 1 . Burawoy, M . (1979) Manufacturing Consent - Changes in the Labour Process under Monopoly Capitalism . Chicago and London : University of Chicago Press . Child, J . (1985) `Managerial Strategies, New Technology, and the Labour Process', in Knights, D . et al (eds), Job Redesign : Organization and Control of the Labour Process . London : Heinemann .

Labour process Edwards, R . (1979) Contested Terrain . London : Heinemann . Friedman, A .L . (1977a) `Responsible Autonomy versus Direct Control over the Labour Process', Capital & Class 1 . Friedman, A . L . (1977b) Industry and Labour . London : Macmillan . Friedman, A .L . (1981) Worker Resistance and Marxian Analysis of the Capitalist Labour Process . Mimeo, University of Bristol . Friedman, A . L . (1984) `Management Strategies, Market Conditions and the Labour Process', in Stephen, F .H . (ed .), Firms, Organization and Labour . London : Macmillan. Friedman, A . L . & Greenbaum, J . (1984) `Wanted : Renaissance People', in Datamation, 1 September. Friedman, A .L . & Cornford, D .S . (1985) Strategies for Meeting User Demands : An International Perspective . Mimeo, Universty of Bristol . Gospel, H . (1983) `Managerial Structure and Strategies : An Introduction', in Gospel, H .F . & Littler, C .R . (eds), Managerial Strategies and Industrial Relations. London : Heinemann . Jackson, M .A . (1975) Principles of Program Design . London : Academic Press . Kelly, J . (1985) `Management's Redesign of Work : Labour Process, Labour Markets and Product Markets', in Knights, D ., Willmott, H . & Collinson, D . (eds) job Redesign Critical Perspectives on the Labour Process . Aldershot : Gower . Littler, C. (1982) The New Development of the Labour Process in Capitalist Societies. London : Heinemann Educational Press . Malcahy, S .D . & Faulkner, R .R. (1982) `Work Individuation Among Women Machine Operators', Sociology of Work and Occupations, 4 :3 . Malcahy, S .D . & Faulkner, R .R. (1979) `Person and Machine in a New England Factory', in Zimbalist, A . (ed.), Case Studies on the Labor Process. New York : Monthly Review Press . Marglin, S . A . (1974) `What Do Bosses Do?', Review of Radical Political Economics, 6 . Manwaring, R . & Wood, S . (1985) `The Ghost in the Labour Process', in Knights, D ., Willmott, H . & Collinson, D . (eds), job Redesign Critical Perspectives on the Labour Process . Aldershot: Gower . Mumford, E. (1972) Job Satisfaction: A Study of Computing Specialists . London : Longman. Nichols, T . (ed .) (1980) Capital and Labour. Glasgow : Fontana . Noble, D .F . (1979) `Social Choice in Machine Design : the Case of Automatically Controlled Machine Tools', in Zimbalist, A . (ed .), Case Studies in the Labour Process . London : Monthly Review Press . Ramsay, H . (1985) `What is Participation For? A critical evaluation of "labour process" analyses of job reform', in Knights, D ., Willmott, H . & Collinson, D . (eds), job Redesign Critical Perspectives on the Labour Process . Aldershot : Gower . Roberts, K . (1978) `Book Reviews of Class Conflict and the Industrial Relations Crisis and Industry and Labour Class Struggle at Work and Monopoly Capitalism', Sociology, vol . 12 . Rose, J . & Jones, B . (1985) `Management Strategy and Trade Union Response in Plant-Level Reorganisation of Work', in Knights, D . et al (eds), job Redesign: Organisation and Control of the Labour Process . London : Heinemann . Schwarz, B . (1978) Book review of Industry and Labour Class Struggle al

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Work and Monopoly Capitalism . Mimeo . Strinati, D . (1985) `Capital, the State and Industrial Relations Strategies in Britain : From Corporatism to Populism?' Presented to the Labour Process Conference, mimeo . Taylor, F . W . (1967, orig . 1911) The Principles of Scientific Management . New York : Norton . Thompson, P . (1983) The Nature of Work . London : Macmillan . Weinberg, G . (1971) The Psychology of Computer Programming. New York : Van Nostrand Reinhold . Wilkinson, B . (1983) The Shopfloor Poltics of New Technology . London : Heinemann . Wood, S . (1982) `Introduction' in Wood, S . (ed .), The Degradation of Work? London : Hutchinson . Wood, S . & Kelly, J . (1982) 'Taylorism, Responsible Autonomy and Management Strategy', in Wood, S . (ed .), The Degradation of Work? London : Hutchinson . Yourden, E . & Constantine, L . L . (1979) Structured Design . Englewood Cliffs, New Jersey : Prentice-Hall . Zeitlin, J . (1978) `Class Struggle and Monopoly Capitalism', Society for the Study of Labour History Bulletin, No . 37 . Zimbalist, A . (1979) `Introduction', in Zimbalist, A . (ed .), Case Studies on the Labour Process . London : Monthly Review Press .

R A Bryer and T J Brignall

Divestment and inflation accounting : an unemployment machine? • THE MOST important

economic event in the UK since the 1930s has been the rundown of manufacturing industry, particularly between 1979 and 1981 . Although manufacturing plants had been steadily closing since the late 1960s, the pace suddenly accelerated when a Conservative government came to power in May 1979 . Between 1969 and 1981 employment in manufacturing industry fell by 2 .4 million jobs, but half of them were lost after 1979 . Manufacturing output followed a similar pattern . In 1973 manufacturing output was at an all-time peak, but by 1981 it had fallen by 22%, back to its level in 1967 . Again, two-thirds of the fall occurred after 1979 . The collapse of output and employment in manufacturing industry after 1979 was no simple `recession' . Between 1979 and 1983 some £25 billion of capital equipment (in 1980 prices) was scrapped, and just to replace this would require UK manufacturing industry to double its 1984 level of investment for 5 years (Robinson & Wade, 1985) . Closures on this scale can only be called mass `divestment', because to divest (or disinvest) is `to strip or deprive of anything' (Chambers Twentieth Century

Dictionary) . While there are many explanations of the underlying cause of the rundown (e .g . endemic 'deindustrialisation' ; poor labour productivity ; inept or perverse government policies ; poor marketing, design and delivery ; the `British Disease' ; low in-

Inflation accounting is widely viewed as an irrelevant technicality . Bryer and Brignall argue, however, that its introduction facilitated mass divestment from UK companies by providing information to investors and managers to allow them to reassess the profitability of industry . The authors also contrast their controversial view of the role of inflation accounting with the 125 traditional interpretation offered by academic accountants .

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vestment ; etc ., I few should argue with the proposition that the immediate cause of the closures were managements' perceptions that the businesses concerned had poor profit prospects . In effect, explanations of the underlying causes of the rundown are analyses of why much of UK manufacturing industry had become unprofitable, but a full explanation requires an analysis of the closure decisions as well . Concentrating exclusively on the economic circumstances in which the rundown took place presumes that they made it inevitable . However, by asking why, how and when the closure decisions were made we may hope to learn more about how and the extent to which our economic system is controlled and, perhaps, what may be necessary to change it . However, at first sight even identifying the decision-makers may seem an impossible task because, if it is taken literally, there could be thousands of people and hundreds of companies involved . However, the scope of our inquiries can be usefully reduced in two ways . Firstly, investigations reveal that at the core of the rundown of UK industry were just 83 major manufacturing and construction companies, most of them listed on the London Stock Exchange, who between 1979 and 1982 were responsible for almost 700,000 job losses out of a total over this period from these sectors of 1 .7 million (see Appendix) . We will look at these companies in more detail later . Secondly, if we restrict our attention to the financial aspects of closure decisions, and presume for the moment that they are determining in the last instance, the scope of our inquiries is further reduced because, in addition to senior company managements, the most important sectors involved were private shareholders (henceforth `investors') and their `agents' : financial analysts (whether in banks, stockbrokers or other financial institutions), reporting accountants and, when it was needed, the State . An `agent' is a person or organisation authorised or delegated to transact business for another . The conventional view in accounting and finance is that the interests of investors should dominate financial decision-making . A major reason for presuming that their interests also dominate in practice, even though agency problems may sometimes make outcomes less than perfect, is that investors are the most economically powerful group in society . Contrary to popular opinion, the growth of pension funds, investment trusts, life assurance companies and unit trusts has not significantly fragmented the ownership and control of UK industry . Although the proportion of company shares held by financial institutions increased from around 30% in the 1960s to 66% by the late 1970s, only the investments by self-administered pension funds could

Inflation accounting

be said, even in principle, to represent a widening of the ownership and control of UK industry because all other financial institutions are in turn owned by investors . In effect, what has happened since the 1960s is that individual shareholders have increasingly delegated the management of their investments to financial institutions . As only around 20% of shares are held by self-administered pension funds, the other 80% must be held in the interests of individual investors, 30% held by them directly, and 50% held indirectly by financial institutions . 2 Who are these individual shareholders, and to what extent do their interests dominate managements' financial decisions? The first question has an unambiguous answer . The most striking characteristic of investors is their wealth . The 1 wealthiest individuals in the UK own well over 50% of all shares held by individuals, and the 5% wealthiest own some 80% (Income and Wealth, HMSO, 1980) . The second question is the subject of this paper . As specialists in accounting and finance, our conviction is that investors' interests in dividends and capital gains clearly dominate financial decision-making, and we shall briefly present some of our stock-in-trade to support this presumption . However, most of the paper is devoted to an analysis of the development, implementation and usefulness of inflation accounting . 3 Although at first sight this may appear to be of only technical interest, in our view it should be of concern to a much wider audience because, if our assessment is correct, inflation accounting played an important role in the rundown of UK manufacturing industry after 1979 . We proceed as follows : firstly, we show that the conventional model of financial decision-making within accounting and finance is based on financial reporting and investment management systems which are designed to ensure that investors' interests predominate . Secondly, we show that the role of inflation accounting is to ensure that financial reports remain an adequate basis for investment and divestment decisions in periods of changing input prices . Thirdly, we argue that the development and implementation of inflation accounting in the UK was designed both to motivate managers to make divestment decisions from manufacturing industry, and to provide information to allow investors to monitor them . Finally, we deal with the conflict between our view that the role of inflation accounting in the UK was to facilitate divestment, and the widely expressed view by prominent accounting academics (and others) that ` . . . there is considerable uncertainty as to the purpose of adjusting historical cost statements for changing prices' (Lee, 1983 : 376) . In the final section we suggest that this conflict can only be resolved by supposing that, because of the potential political consequences of

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holding a public debate on the impending rundown of manufacturing industry, the so-called `great inflation accounting debate' (Perrin, 1976) as far as possible avoided discussing its divestment implications . Modern financial reporting and investment management

With the unprecedented rapid growth of large-scale industrial enterprises at the end of the 19th century in the USA, and in the early 20th century in the UK, came an equally rapid development in financial reporting to investors as capital was raised from stockmarkets and shares were traded . Although the rich have throughout history diversified their investments to reduce their total exposure to risk, the diversity of modern industry vastly increased the opportunities and potential benefits . However, its complexity and scale made direct control impossible, and for the first time invetors became heavily reliant on published financial reports . To construct well-diversified portfolios requires that comparable information about the risks and returns of, in principle, all potential investments be available so that only `efficient' portfolios are held . 4 However, because it would be prohibitively costly for individual investors to collect the necessary information themselves, the public disclosure of all relevant information must be mandatory for all enterprises, and to prevent Treeriders' and 'insider-trading', and to minimise `adverse selection', 5 it must be publicly-controlled, through not necessarily by government . In short, it is now widely recognised that to investors financial reporting is a classic `public good' which it is in their collective interest to support . Not surprisingly, the modern history of accounting has been dominated by the objective of securing the publication of comparable, relevant and reliable information to investors . Although the public regulation of financial reporting is costly, requiring the services of many accountants, auditors and financial analysts, the benefits can be considerable . If financial reports are reasonably faithful representations of companies' financial performances and useful guides to their future prospects, and if investors collectively correctly interpret them and impound the information `efficiently' into share prices then, as Beaver puts it, investors without effort or incurring costs are able to act as `price takers' and can adopt simple, relatively costless portfolios that reflect the information . . . (available) . In other words, they can act as if they are adopting, as their own, the consensus or composite beliefs reflected in price, which in turn reflect a comprehensive information system (1981 : 190) .

Inflation accounting The evidence supporting the view that financial reports are useful to investors is overwhelming (for reviews of the extensive literature on this subject see : Lev, 1976 ; Beaver, op . cit . ; Griffin, 1982 ; Keane, 1983) . The two major financial reports to investors are a profit and loss account and a balance sheet, and they are useful because in combination, and interpreted in the context of background economic information, they can be used to provide a useful and reliable measure of an enterprise's economic returns and risks . Although accounting rates of return have been used for many years as the best overall measure of companies' financial performances (regardless of the criticisms of economists), it is now understood that they do have an unambiguous economic interpretation (Kay, 1976 ; Beaver, op . cit .) . 6 Perhaps the easiest way to understand this is to conceive of a business which, after appropriating depreciation and reinvestment, produces a constant accounting income stream in perpetuity . This business's accounting rate of return exactly equals its economic rate of return, and with appropriate manipulations any accounting income stream can be reduced to its equivalent economic returns . 7 It will come as no surprise to those who hold accounting in low intellectual regard that a simple `stationary state' model lies at the heart of accounting theory . The conventional historical cost measure of income is, in fact, simply a forecast of the long-run average surplus that could be distributed to investors on the assumption that the enterprise's history continues to repeat itself indefinitely (May, 1976) . While this simple model may seem naive, if not downright unhelpful, in practice it is extremely useful, and for two reasons . Firstly, through their statements and their choice of accounting techniques, management can use the financial reports to communicate to investors what they expect their enterprise's stationary state income to be (Ronen & Sadan, 1975) . Secondly, the conventional accounting model is useful because it provides a reliable and well-understood benchmark against which investors and financial analysts can test their own understanding of an enterprise's prospects, and which they can manipulate to reflect their own expectations . As history rarely repeats itself exactly, financial reports must always be interpreted in the context of other relevant information . This is why financial analysts are better at forecasting profits than even sophisticated statistical extrapolations of past profits, and why the best predictor of a company's profits is its share price, because this reflects the collective wisdom of investors and their agents . To sum up, there are good reasons for supposing that investors' interests dominate financial decision-making, and that at the core of the system is the accounting model of income as an estimate of steady state distributable cash flow . However, there C, : C

':;~:,-- 1:

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can be conflicts within the accounting model, particularly between relevance and objectivity . While the need for reliable, independent information encourages a disposition towards using the historical costs of inputs in preparing financial statements, when input prices change markedly the need for more relevant information requires the use of their current costs . While current costs are likely to be more subjective and less reliable than historical costs, when the need arises relevance takes priority . The role of inflation accounting in investment appraisal

The necessity for stabilising accounts for large changes in input prices has been understood for many years, but perhaps the best-known exponent of the use of current values for investment appraisal is James Bonbright (1937) who organised asset valuation around the concept of `value to the owner' . Bonbright reasoned that if the owner of an asset that was worth replacing were to be deprived of it, s/he could be adequately recompensed by receipt of its replacement cost . Alternatively, if s/he was planning to sell it, deprival could be recompensed by receipt of its sale value . Finally, if s/he was planning to use the asset but not replace it when it wore out, its deprival could be recompensed by receipt of its present value . s However, just as the value of an asset to its owner depends upon whether it is best to replace, sell, or use it, the optimality of each of these courses of action can be tested by calculating and comparing the returns expected from following them . Thus, to decide if it is worth replacing assets, the expected rate of return on the replacement cost of their modern equivalent should be compared with the rate of return required by investors for assets with the same relative risk . 9 If the company's shares are traded and the stockmarket is efficient, the best estimate of the present value of its assets is the company's total stockmarket value . Clearly, if the collective view of investors is that the expected returns from a company are less than the cost of replacing its assets with their modern equivalents (i .e . its valuation ratio is less than 1) they will want management to stop reinvesting, and to consider either using the assets to the end of their economic life or selling them . The decision whether to sell or hold assets is made by comparing the present value of the returns expected from using them with their `net realisable value' . So long as the present value of the assets is greater than the net receipts from selling them, they will continue to be used ; otherwise, they will be sold, that is, disinvested . For many years the demand for relevant, comparable and reliable financial reports that emerged in the 1920s and 1930s was satisfactorily met by the adoption of historical cost accounting

Inflation accounting 131

because, from then until the late 1960s, UK prices were generally stable (although drifting upwards) . Over this period, almost unique in history, the use of current values was rare, with problems being dealt with by allowing specific exceptions to historical cost, particularly for writing assets down to their net realisable value or present value when either of these was lower than historical cost . However, during the late 1960s and early 1970s, when current costs began to diverge markedly from historical costs, this conventional basis for financial reporting began to be questioned . Because current costs are more subjective and less reliable than historical costs there was an initial reluctance to use them for financial reporting . Some accountants and academics suggested that to the extent that any one of the government's estimates of general inflation reflected current costs, some of the relevance of current costs could be gained without loss of objectivity by simply stabilising published accounts for changes in inflation .' 0 However, we shall see that the correspondence between general inflation and current costs in manufacturing industry was too crude for cpp accounting to be acceptable to investors as a surrogate for current cost accounting (CCA) ."

We have seen that the decision to reinvest depends upon the ratio of expected present value to replacement cost . The total investment of UK industrial and commercial companies and their aggregate valuation ratio from 1963 to 1978 is shown in figure 1 below . Not only are total investment and the aggregate valuation ratio closely correlated with each other, they are also closely correlated with the development and implementation of inflation accounting . As the aggregate valuation ratio fell sharply after 1968 interest in inflation accounting was suddenly aroused, and when it fell below one for the first time in 1973-4 interest in it became intense . The fall in the valuation ratio in 1968 was associated with the devaluation of sterling in November 1967 and the continued deterioration in the competitiveness of UK manufacturing industry under the pressure of sharply rising raw materials costs . In August 1968 the Institute of Chartered Accountants in England and Wales (ICAEw) reacted by publishing `Accounting for Stewardship in a Period of Inflation' which suggested CPP as an initial step towards the introduction of CCA, if it became necessary . By late 1970 the aggregate valuation ratio was fast approaching one, and in February 1971 the Financial Times published a stern editorial on inflation accounting, reflecting widespread

The development of inflation accounting : from CPP to CCA



Capital & Class 132

concern that because of ` . . . inadequate allowance(s) . . . for replacement of fixed assets and stocks, earnings . . . seem to be larger than they really are . . . (and) . . . the published fall in the share of profits in national income understates the real seriousness of the problem . . .' (Monday 8 February, 1971) . The editorial went on to warn the accounting profession not to ` . . . dismiss this as an academic issue' because it was ` . . . a great deal more important than that' (ibid) . It was no coincidence that in March 1971 the ubiquitous Sir Henry (now Lord) Benson wrote to the President of the ICAEW urging it to get to grips with inflation accounting, 12 or that the Accounting Standards Committee (Asc) responded by setting up a `Plenary Committee' on inflation accounting consisting of representatives from the Stock Exchange, the CBI, the Bank of England and the Department of Trade and Industry (Westwick, 1980 : 356) . In May 1971 the Plenary Committee considered a

Figure 1 :

Investment and the valuation ratio

Per cent --6 .0

Source : Jenkinson, 1981, p . 13 0.5 1 64

66

I 68

I 70

•l ' I 72

74

I 76

78

[a] Gross investment as a percentage of the previous end-year gross capital stock at replacement cost .

Inflation accounting paper prepared by the ICAEW, `Inflation and Accounts' (ICAEW, 1971) which also suggested cPP as an initial surrogate for CCA, but the divestment implications of inflation accounting were only hinted at . It concluded : . . . the more useful information from CPP figures may lead to reappraisals of companies by investment and credit analysts and others and may lead to increased pressure on the directors of some companies to increase the real profitability of their organisations, with potentially major policy implications (ibid) . However, the CBI had set up its own committee on inflation accounting (because' . . . of the importance of the subject'), and this time the divestment implications were spelled out : (t)he long term effects of inflation accounting will be to widen the ratings given by the market to individual companies . . . Those companies whose present difficulties are more clearly exposed by inflation accounting will be downgraded . . . and may find it more difficult to raise capital in the future . . . (CBI, September 1973 : 9) . Because UK companies on average return to the stock market every four years or so to replenish their capital, difficulty in raising capital is a prelude to closures . In the Committee's interim report on inflation accounting in January 1973 the same paragraph concluded : `This may be painful but it is as it should be' (p . 6) . And for most of the companies represented on the committee (GKN, Pilkingtons, Thomas Tilling, ICI, Hawker Siddeley, British Steel, Unilever, Tube Investments, Dunlop) the results were very `painful' . As we shall see, these were some of the major divestors at the centre of the rundown after 1979 . However, in early 1973, even though inflation was increasing, the dominant view was that there was no need for the immediate introduction of current cost accounting . The economy was expanding rapidly, and both profits and the aggregate valuation ratio were rising . Because of the neglect of UK manufacturing industry over the previous 20 years, 13 and with continued world economic growth widely expected, many people thought that now was the time for it to be re-equipped and expanded . As a survey published in the Financial Times on 9 July put it : The task now for UK manufacturers is to . . . start closing the productivity gap by investing in the re-equipment of their factories . . . The opportunities are waiting to be grasped (p . 17) . Evidence that a major re-egipment and expansion of manu-

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facturing industry was expected were the plans that were being laid for the pivotal sectors of steel and autos . The steel industry had been planning a major expansion and modernisation of its large plants since the mid-1960s, and in March 1973 British Steel gained government approval to invest £3 billion over ten years (Bryer, Brignall & Maunders, 1982), and the Financial Times' survey reported that `British Leyland ha(d) just announced a massive five year investment progremme likely to involve an expenditure of around £500 million, which should act as a major boost to machine tool makers and other sectors within mechanical engineering' (op . cit ., p . 24) . In these circumstances there was no urgent need for CCA because few would need convincing that old plant should be replaced . The major financial decisions would be whether the expected net present value of the new assets was positive, and these decisions would be made using detailed forecasts and evaluations of cash flows rather than the simple accounting model ." However, during this period the prospects for the UK economy were being transformed . Although commodity prices had been rising rapidly from mid-1972, by April 1973 the worst appeared to be over, even though there was continuing concern about a possible `energy crisis' because of oil shortages in both the USA and the EEC in the winter of 1972, and the growing strength of OPEC . However, by the end of May 1973 both sterling and the stock market were sharply declining, and the June 1973 issue of the Bank of England Quarterly Bulletin was preoccupied with' . . . the struggle with inflation . . . (which) . . . continued to overshadow other events and colour assessments of the outlook' (p . 132) . On 27 June the Financial Times reported the CBI' . . saying, basically, that the profitability of British Industry has been undermined to a point where there is a real threat to investment because the return on capital is approaching an unacceptable level' (p . 22) . On 4 July the Financial Times even suggested that ` . . . a continuing drop in the return on investment . . . would raise doubts about what is loosely described as the capitalist system'! By the end of July, with both the FT 30-share index and sterling now in steep decline, the Heath government executed its infamous U-turn, and on 25 July 1973 the government announced the formation of a Committee of Inquiry, in effect, into whether CCA was really necessary . Inflation accounting was now far too serious to be left to the accountants. When the minister announced the inquiry he emphasised that ` . . . inflation accounting . . . involved issues much broader than pure accounting matters', and that it would ` . . . take into account a broad range of issues including the implications for investment and efficiency ; the

Inflation accounting allocation of resources through the capital market ; the need to restrain inflation' (Financial Times, 26 July 1973) . In the circumstances, and those which were about to unfold, it was 'investment' and the `allocation of resources' that were to dominate the inquiry . By January 1974, when the 'Sandilands Committee' 15 started work, the average price of crude oil imports to the UK had increased by 60%, and it found itself ` . . . in an atmosphere in which inflation accounting, having been the subject of theoretical discussion among accountants for many years, had become a subject of great urgency for UK industry' (HMSO, 1975 : 2) . 16 The Sandilands Committee's conclusion was emphatic : CCA ` . . . provides the market with the most useful information it can reasonably expect from an accounting system . . ' ( HMSO, 1975 : 222), and it was useful to management because it `may indicate, for example, that a particular process, while currently profitable, will not continue to be profitable when the existing assets concerned are exhausted' (p . 218) . In short, the Committee hoped that the results of showing assets at their current `value to the business' may make clear to the management (and the shareholders) of certain companies that the level of investment in assets in terms of their `value to the business' is excessive in relation to the level of activity or to the results being achieved (pp . 218-9) . In plain English, current cost accounts would reveal which plants should close . The Committee urged companies to immediately start using and publishing at least outline current cost accounts, and not wait for a detailed standard from the accounting profession . Although we shall see that the accounting profession had some difficulties in implementing CCA, by the end of 1979 the Bank of England reported that ` . . . the majority of listed companies either already provide current cost information in some form, or have undertaken to do so upon the publication of a standard' (June 1980 : 160) . All was ready for divestment when the need arose . 17 Divestment and inflation accounting And the need came quickly, for in 1979 the second oil crisis struck . Crude oil prices doubled again from their 1974 levels, and by 1981 manufacturing industry was paying 15 times more for oil than it had in 1971 . Because of the importance of oil to manufacturing industry oil price increases alone doubled its total raw

135



Capital & Class 136

material and fuel costs, and by 1981 the aggregate valuation ratio had fallen to its lowest ever level . When the aggregate valuation ratio fell below one after the first oil shock many major manufacturing companies stopped reinvesting, implying that the present values of some or all of their assets were expected to be less than their replacement costs . Although there was a fall in total investment in manufacturing industry in 1975, which hastened its trend decline, the major impacts of this oil crisis were the cancellation of major reinvestment and expansion programmes and the accelerated scrapping of existing assets (see, for example, Bryer, Brignall & Maunders, 1982 ; Williams, Williams & Thomas, 1983 ; Pettigrew, 1985) . Significantly, it was investment in industrial buildings that experienced the sharpest and most sustained fall, implying that factory expansions and renewals had been curtailed, whereas investment to improve the efficiency of plant and machinery

Figure 2 : The aggregate valuation ratio of industrial and commercial companies

1

1964

68

73

78

83

Source : Bank of England Quarterly Bulletin, September 1984 : 358 .

Inflation accounting

began to recover after 1977 (Robinson & Wade, op . cit .) . The effect of these changes was that between 1974 and 1979 the gross capital stock in manufcturing industry fell by 12%, reversing the previously uninterrupted expansion from the late 1940s (National Institute Economic Review, November 1983 : 23) . The fact that there were, nevertheless, no mass divestments suggests that present values were typically expected to be greater than net realisable values . However, when the aggregate valuation ratio fell again after 1979 there were mass divestments, implying that for many major companies present values were now expected to be less than net realisable values . We have argued that the requirement to publish CCA was intended to put pressure on managements to contemplate and, where necessary, to make divestment decisions when CCA returns were unacceptable, but what evidence is there that it was useful in practice in facilitating the making and monitoring of these decisions?' 8 Between 1979 and 1982 some 1,700,000 jobs were shed from the UK's manufacturing and construction industries . Closures and job losses were concentrated in the sectors with the poorest CCA returns (engineering, steel, vehicles and textiles : Williams, 1981) but, because UK industry is dominated by a relatively small number of companies, we can account for most of them by focussing on the major 'unemployers' . To find them we searched through the Times 1,000 for the major manufacturing and construction companies that had reduced their UK employments by 1,000 or more between 1979 and 1982 . We identified 83 companies who were responsible for almost 700,000, or 40%, of the total job losses over this period . 19 Merely supposing that job losses in these key companies had an average multiplier effect of 1 .5 within manufacturing and construction would account for all the job losses in these sectors beween 1979 and 1982 . 20 Using Datastream averages for the period 1979 to 1983, 50 of these major unemployers had valuation ratios less than one . (Datastream is a financial databank designed for and sold mainly to financial analysts .) Because our valuation ratios are calculated from published consolidated accounts, an overall ratio of less than one is a clear signal that investors wanted management to consider closing major parts (but not necessarily all) of their businesses, and they did . These 50 companies were responsible for 530,000, or nearly a third, of the total jobs lost from manufacturing and construction from 1979 to 1982, and they account for nearly 80% of the jobs shed by our sample companies . The CCA results of the remaining 33 companies in our sample with average valuation ratios equal to or greater than one would have been interpreted by financial analysts by looking in detail at

137

Capital & Class 138

the results and prospects of their various businesses . For those companies with average valuation ratios close to one (16 of the 33 are 1 .25 or less) CCA results show that important parts of their businesses were under threat, while for those with valuation ratios well in excess of one the CCA results show that only minor parts of their existing businesses were under threat . However, while for many companies their CCA results signalled the need to reappraise their investments, managements did not necessarily use CCA in their management accounts, although many important companies did . If overall CCA returns are unacceptable, a detailed CCA approach to investment appraisal is only necessary when the replacement of the existing assets is contemplated, and will not be necessary when either (a) unacceptable historical cost returns are expected, or (b) technological change requires investment in different assets, or (c) the nature of the business requires the continual acquisition of new assets at their current costs . 21 Thirty-two of our major unemployers are known to have used CCA in their management accounts, and these companies were responsible for some 265,000 job losses . 22 Surveys show that where CCA was used in management accounts it was useful in divestment decisions . Archer and Steele, for example, surveyed 1,500 companies and concluded that ` . . . a classic use of CCAbased management accounting . . . (was to) . . . highlight . . . product(s) or operation(s) . . . where . . . substantial new investment is unlikely to be profitable . . . (which are) . . . candidate(s) for being run down or disposed of, and they suggested that it was particularly useful in ` . . . capital-intensive business(es) with . . . substantial proportion(s) of rather old assets . . . (where) . . . CCA-based management accounts may provide a new look at ageing business operations and product lines which might not be viable if fixed assets had to be replaced at current prices' (op . cit ., pp . 392-3) . The companies in our sample not known to have used CCA in their management accounts can be broadly classified into the three groups of companies distinguished above for whom CCA was not strictly necessary for management's divestment decisions . 23 The first group are typified by companies such as BSC, BL, Johnson and Firth Brown, AE, Turner and Newall, Chloride and Courtaulds, all of whom were earning low historical cost returns from the moribund textile, auto, steel and engineering industries . Central to this group's fortunes were the structural transformations that were taking place in these industries and, because there was no prospect of replacing their existing assets, their investment decisions were being taken within a net present value framework . 24 The second group are typified by companies

Inflation accounting such as Plessey, STC, Cadbury Schweppes, Rank Hovis McDougall, Glaxo and Fisons, all of whom were in industrial sectors (e .g . telecommunications, food-processing and chemicals) undergoing rapid technologica change which made existing assets obsolete . Again, the appraisal of investment in new assets would be undertaken within a net present value framework . The third group are companies such as George Wimpey, Tarmac, Davy Corporation and Powell Duffryn, who do not own significant amounts of fixed assets but construct them for others . As a result, their management accounts require little adjustment for changes in the current costs of their inputs . Although for none of these companies was CCA strictly necessary for management's divestment decisions, when used in conjunction with other information it clearly signalled the need to make them . The divestment implications of CCA for UK industry have never been discussed in the accounting literature . There appear to be two explanations for this remarkable omission . Firstly, even some prominent accounting academics appeared genuinely ignorant of the potential role of inflation accounting in divestment . Secondly, those who did appear to understand the objective of CCA were extremely circumspect in their analyses, presumably because of the political implications of discussing its future role in organising mass unemployment .

The neglect of divestment An example of an apparently straightforward misunderstanding of the objective of CCA is the assertion by Professor Whittington that the . . . fundamental problem . . . (with) . . . value to the owner . . . (is that it) . . . has never been demonstrated to arise out of a particular information requirement of a potential user of financial reports, other than that of an insurer (1983 : 136) . James Bonbright, the originator of the term `value to the owner', was Professor of Finance at Columbia University . Although it is true that his ultimate aim was the production of a `Treatise on the Appraisal of Property for Different Legal Purposes', particularly insurance claims, any reading of the first 12 chapters of his major work (1937) on `Concepts of Value' and `Methods of Valuation' shows that Professor Whittington's assertion is impossible to accept, even for Bonbright . Also, as we have seen, subsequent development of the concept of value to the owner shows it to be the basis of the valuation ratio, and this has

139

Capital & Class

140

an unambiguous role in reinvestment and divestment decisions . A good example of the reluctance of academics to discuss the divestment implications of CCA, even when they appear to recognise them, is the review by John Kay of the Sandilands Committee report and the proposed CCA standard, ED18 (ASC, 1976) . He claimed that because . . . Sandilands . . . (had) . . . failed to provide a coherent account of the underlying basis of their system the reader of ED 18 will search in vain for any precise statement of the objectives for `current cost accounting' or the interpretation to be put on the figures which emerge (1977 : 308) . This statement is simply not true for Sandilands, as we showed earlier . As for ED 18, it said that CCA would give . . . more realistic information . . . (to) . . . enable a clearer picture to be obtained of the relative performance of: (a) managers and products within a company ; (b) different companies ; and (c) different industries and should help to lead to better decisions being taken in such areas as . . . resource allocation between and within companies . . . (ASC, 1976 : 47) . If a clearer picture of the relative performance of investments reveals that some of them have unsatisfactory returns, resources will presumably be allocated out of them! In plain English, CCA would improve divestment decisions . John Kay recognised that much of UK manufacturing industry would have low CCA returns (p . 310), but he appeared unclear about the likely effects of this on `investment policy' as these would, he thought, ` . . . depend on how much attention lenders and the capital market generally devote to "current cost profit" . . . and how seriously management take the view that this is an appropriate maximand for their firms' (ibid) . It is not clear from this whether Kay does not understand the objective of CCA ; thinks that lenders, the capital market and management do not act in investors' interests ; or has fudged the divestment issue . Another curious criticism of the Sandilands Committee came from Professor Edward Stamp (1975), an eminent authority on inflation accounting, and `chief accounting adviser' to the Treasury when the government decided to set up the committee . Although in 1971 Stamp had demonstrated a clear understanding of the divestment implications of CCA (see p . 566), in 1975 he criticised the Sandilands Committee for not studying ` . . . the likely effect of the introduction of their new current value system . . . upon share prices, dividends and the capital investment

Inflation accounting plans of major companies . . .' (1975 : 408). Although he recognised that for many UK companies ` . . . economic value . . . lie(s) below replacement cost' (p . 409), he gave no hint that divestment might follow . Instead, he suggested that ` . . . the use of current values in financial reports will assist in achieving a better allocation of resources within the British economy and so help in revitalising Britain' (ibid) . However, given his call for a study of the potential effects of CCA, this statement is at best an article of faith, and at worst it is positively misleading . It is hard to avoid the suspicion that these apparent errors and ambiguities have political significance because, given that the objective of CCA was to facilitate and help monitor mass divestments from UK manufacturing industry, it is reasonable to expect a predisposition (whether conscious or unconscious) to limit public discussion of this fact, and several other features of the inflation accounting debate support this view . The politics of the inflation accounting debate In 1971 the ICAEW had warned that inflation accounting's implications for the effective deployment of economic resources need no labouring' (1971 : 497), and the CBI cautioned that its introduction ` . . . might create disquiet in the minds of the trade unions . . .', and argued that ` . . . it was essential to take steps to allay this . . .' (1973 : 10) . Although the cBI suggested `education and explanation . . . (to) . . . take into account the special needs of the unions' (p . 19), the basic approach of the accounting profession was, as far as possible, to avoid mentioning divestment . Thus, even though the background papers to the proposed and provisional Standard on cip accounting clearly understood that it was to act as a surrogate for CCA, PSSAP7 coolly claimed that its ` . . . purpose . . . (was) . . . the limited (sic) one of establishing a standard practice for demonstrating the effect of changes in the purchasing power of money' (ASC,1974 : 3) . Although the Sandilands Committee did provide a reasonable presentation of the case for CCA, a good grounding in accounting theory is necessary for a full apprciation, and there is little on its implications for divestment . Perhaps it was because these were more fully discussed in its written and oral evidence that it decided not to publish either . Because CCA would be irrelevant to many companies, expensive, and difficult to understand, it was predictable that the accountancy profession would face difficulties in implementing it . It is curious, therefore, that the Sandilands Committee maximised the problems of the accounting profession by insisting that CCA be published by all limited companies . Although it

141

Capital & Class

142

clearly understood that CCA was only necessary for those manufacturing companies that may have needed to divest, the alternatives of either making CCA a legal requirement or devising an accounting standard to apply only to potential divestors were, presumably, even more unpleasant to contemplate, because they could both have involved a public examination of the purposes of current cost accounting . The Sandilands Committee eventually convinced itself that . . . no amendment to the Companies Act . . . (was) . . . required in order to enable companies to adopt Current Cost Accounting . . . (because) . . . (t)he Acts require that company accounts should show a'true and fair' view, and Current Cost Accounting would . . . (be necessary to) . . . meet this requirement of the law (p . 166) . Unfortunately for the ICAEW, the professional body most involved in implementing CCA, this was pure wishful thinking . The proposed CCA Standard (ED 18) met with a storm of criticism from the large majority of companies for whom it was irrelevant, which culminated in an embarrassing grassroots revolt by a majority of the ICAEW's membership who insisted that CCA should not be mandatory. However, as by this time many of the companies that needed to consider divestment were preparing to voluntarily publish CCA, voluntary and simplified `guidelines' could safely be allowed, and these were introduced in November 1977 (ASC, 1977) . 25 Although over 500 companies published CCA under SSAP16 in 1980, to achieve even this modest coverage required embarrassing compromises over which companies had to apply it, and the introduction of monetary adjustments . 26 Firstly, even though the Asc has, with government support, consistently argued for the general application of CCA on the ground that all accounting standards must be generally-accepted, because of the failure of the accounting profession to provide a rationale for CCA, it was forced in SSAP16 to ignore Sandilands' insistence that all companies should publish CCA to show a `true and fair' view, simply requiring it for listed and large companies . Many have interpreted this compromise as a serious weakening of the Asc's authority . Secondly, although Sandilands dismissed monetary adjustments as irrelevant, the ASC was obliged to allow them when it was realised that CCA profits would be so bad that dividend covers would look very silly and could lead to calls for higher retentions of profit for reinvestment, just at the time that investors wanted dividends maintained or increased to help divestment . 27 As Gibbs, Percy and Saville of Stockbrokers Phillips and Drew put it,

Inflation accounting 143 (i)t is . . . very difficult to justify the introduction of a system of inflation accounting which suggests that large numbers of companies are currently paying dividends out of capital . . . (and) . . . unless the Sandilands recommendations are modified, or profits rise much more rapidly . . . than we are currently expecting, large numbers of companies will have to consider cutting their dividends (1976 : 62-3) . Because cpp monetary adjustments involve substantial 'addbacks' to distributable profits they would have solved this problem, but cpn had been publicly denounced by Sandilands . This difficulty was resolved by the introduction of a gearing adjustment, which also allowed substantial add-backs to profit, but which had no conceptual affinity to cPP accounting. However, allowing one type of monetary adjustment made it impossible to resist embarrassing demands for others . The banks in particular pressed very hard to be allowed to deduct a net monetary asset adjustment from the very large profits they were earning from high interest rates, and this had to be allowed for everyone . The result of these compromises was the stitching together of a hybrid system of inflation accounting for which no lasting agreement was possible . From 1983 onwards, when the major divestments were complete, there was a rapid decline in compliance with SSAP16, forcing the ASC to make it non-mandatory in June 1985 . Following the rejection of the proposed replacement for SSAP16 (ED35) in late 1985, the ASC recommended to its ruling Consultative Council of Accounting Bodies (CCAB) that they either approach the government to secure legislation or drop CCA completely . The ASC put this proposal forward as all-or-nothing, and many people were surprised when the CCAB rejected it and instructed the ASC to continue its search for a generally acceptable standard, by now a veritable Holy Grail . But the CCAB is clearly in a dilemma . On the one hand, because investors may need CCA again, the accounting profession cannot be allowed to simply drop it on popular demand . On the other hand, it cannot ask for legislation compelling CCA without risking public recognition of its purpose, and consequent political embarrassment . It should come as no surprise that an analysis of the financial background to unemployment based on the conventional framework and techniques of accounting and finance supports many people's suspicion that mass unemployment was the direct result of the pursuit of narrow financial interests . We have argued that the objective of CCA is to facilitate and help to monitor divestment

Conclusion

Capital & Class 144

decisions, and have provided evidence that (a) it was introduced into the UK for this purpose, (b) that it did motivate managements to consider and make divestment decisions, and in many important companies was used for this purpose, and (c) that it was useful to investors (and their agents) for monitoring divestments . As divestment creates unemployment, understanding the development and implementation of CCA is an essential element in a full explanation of the emergence of mass unemployment after 1979 . Unfortunately, few in the labour movement appear to recognise either the importance of investors' interests in determining economic events, or of accounting and finance in understanding and potentially influencing them . Certainly, no Labour government has attempted or even been urged to systematically challenge the right of investors to have financial decisions made in their interests, and we know of no explanations of the rundown of manufacturing industry that highlight the extent to which it was organised in investors' interests . Although many in the labour movement do not accept the glib assurances of economists and politicians that the pursuit of profit is in all our interests, perhaps it is because of their neglect of accounting and finance that this view has never been effectively attacked . Although the implementation of CCA helped to create mass unemployment, perhaps the biggest tragedy of the inflation accounting debate from the point of view of the labour movement was that they ignored it . The TUC even declined an invitation to give evidence to the Sandilands Committee, on the grounds that inflation accounting was a `technical issue'! Perhaps it was because of this type of untutored agnosticism towards accounting and finance that, even though plentiful evidence was potentially available to the labour movment that major divestments were being planned, particularly after the appointment of the Sandilands Committee and the first publications of CCA results, the first time that most people heard of the impending closures was when they were announced . For example, few people seem to have understood what Sir Geoffrey Howe meant when he complained in his first budget speech (12 June 1979) that `profitability . . . (has) . . . dropped sharply in recent yers and . . . the rate of return on capital employed . . . (is) . . . far too low . . . especially (in) . . . manufacturing industries' (HM Treasury, 1979 : 1), or that something was shortly to be done about it . Accounting and finance are major tools of planning and control in investors' interests and, as the history of inflation accounting shows, unless the labour movement masters them, challenges their results, and proposes alternatives, it will remain mastered by them .



Inflation accounting 1. In our view the main factors underlying the rundown were insufficient investment and the increases in energy prices associated with the oil crises of 1973-4 and 1979 (Bryer, Brignall & Maunders, 1984) . 2. See Appendix 3, Table 3 .67, p . 498 of the Committee to Review the Functioning of the Financial System, Cmnd 7937, chaired by Sir Harold (now Lord) Wilson ; hereafter `The Wilson Committee Report' . 3. We use the colloquial term `inflation accounting' to cover both current purchasing power (cPP) accounting and current cost accounting (CCA) . Specific meanings of the term are made clear where necessary . 4. `Efficient' portfolios are those which either offer the highest possible return for a given level of risk or offer the lowest risk for a given return (Markowitz, 1952) . 5. 'Free-riders' are those who would benefit from the publication of information while not bearing any of the costs of its production and disclosure . 'Insider-trading' is buying or selling shares on the basis of privileged information . 'Adverse-selection' is buying or selling shares on the basis of unreliable information . 6. The accounting rate of return is usually defined as the ratio of a measure of accounting net profit to the book value of shareholders' capital or total assets . 7. The most common measure of the economic rate of return is the so-called `internal rate of return', the equivalent average annual rate of interest that is earned on the investment throughout its life . See Beaver, 1981, chapter 3 for illustrations of the relationship between accounting and economic returns . 8. An asset's `present value' is the capital sum that would need to be invested now at the rate of return required on assets of its risk class to provide the same return as that offered by the cash flows expected from the asset . 9. For simplicity, consider a business for which a constant steady state distributable income is expected in perpetuity . Let : i = the expected steady income every year after charging for the replacement of all assets ; r = the annual rate of return on this type of business required by investors ; RC = the cost of replacing the assets ; PV = the present value of the future expected returns from the business discounted at investors' required rate of return . To find the present value of a perpetuity, we simply divide the expected constant annual return by the required rate of return : Thus, PV = L and, therefore, r = i r PV Investors will consider reinvestment in a business to be justified if the rate of return on its replacement cost is greater than the required return . That is, if: i >r but as r= ' RC PV we can simplify the replacement decision by noting it will only be considered worthwhile if PV > 1 RC r. e, c

Notes

145



Capital & Class 146

This is called the `valuation ratio' . 10 . Strictly, only this technique should be called inflation accounting . In the UK it is usually called Current Purchasing Power accounting (crP) . 11 . Some academics have also speculated as to whether cip accounting could in principle provide further useful information to investors in addition to its possible approximation to current costs . However, the clear consensus is that it cannot (Beaver, 1979) . 12 . Lord Benson was a top City accountant for many years, playing many important roles for investors . Another noteworthy intervention on their behalf was his report rubbishing the plans of the major UK steel companies just prior to their nationalisation on very favourable terms to investors : see Bryer, Brignall & Maunders, 1982, chapter 1 . 13 . See the Wilson Committee Report, op . cit ., p . 128, and Jones, 1978 . 14 . Net present value is the difference between the cost of an asset and the total present value of its cash inflows . This surplus immediately accrues to investors because, if the stock market is efficient, it will be reflected in share prices as soon as the investment is announced . 15 . The Committee of Inquiry was chaired by Sir Francis Sandilands, Chairman of Commercial Union Assurance, an important financial intermediary for investors . 16 . Between October 1973 and March 1974 the imported oil price quadrupled . A guide to the seriousness with which investors viewed the implications of this `oil shock' is the uncertainty that was reflected in the average variability and steep fall of share prices on the London Stock Exchange during and immediately following this period . The average variabilities of share prices for 1974 and 1975 were all-time records, higher even than those recorded in the early calamitous days of the Second World War (Brealey, Byrne & Dimson, 1978) . During the period 1973-4 UK equities lost some 60% of their value (Dimson & Brealey, 1978) . 17 . Arguably, the need was felt in 1974-5 but, because the necessary current cost data was unavailable, the Bank of England was compelled to arrange for the clearing banks to provide emergency financing for many of the vulnerable manufacturing companies, and the Labour government provided generous tax relief (see Bank of England Quarterly Bulletin, December 1974) . After 1975 the world economy rapidly expanded in the train of the us, and several parts of UK industry were temporarily reprieved . 18 . Accounting researchers have attempted to answer this question by testing whether investors were `surprised' by CCA results, by looking for significant correlations between them and unexpected changes in share prices, but almost none have been found . Although these findings imply that on average investors accurately anticipated CCA results, this does not mean that they were not useful because, until they were published, it was possible that investors' expectations might not have been confirmed . 19 . Although there may be companies not in our sample that reduced their UK employment by more than 1,000 over this period, in 1979 our companies employed over 2,500,000 people, providing almost a third of all jobs in manufacturing and construction . See Appendix . 20 . Although this multiplier is consistent with the results of studies of the regional unemployment consequences of closures, which typically range between 1 and 2 (Armstrong & Taylor, 1978), these are likely to be



Inflation accounting

underestimates . For example, MacKay, Sladen & Holligan (1984) estimated that the UK economy's multiplier for job losses in the vehicle manufacturing industry in 1982 was 3 .6 . If our major unemployers had an average multiplier of 3 .6 there closures would account for over 2,500,000 job losses . 21 . Because CCA represents `best practice' in management accounts some companies used it even though it may not have been strictly necessary, and others may have not used it where it was . 22 . These companies were identified from Ross, 1980 ; Scapens, Southworth & Stacey, 1983 ; and Archer & Steele, 1984 . We are grateful to Archer and Steele for making their data available to us . 23 . See Appendix . 24 . If only implicitly because, although not all of these companies may have used a formal discounted cash flow approach in their investment appraisals, all that is required in principle is a forecast and evaluation of cash flows . For examples of the explicit use of present value investment appraisal by BSC see Bryer, Brignall & Maunders, 1982, especially chapter 3 ; and for its use by BL see Williams, Williams & Thomas, op . cit . 25 . Extel's British Company Service records that whereas during 1975 only 39 companies published current cost accounts and 100 published CPP accounts, by 1977 only 21 companies published CPP accounts whereas 178 companies, the majority of them in manufacturing industry, published current cost accounts . In 1977 47 of our major unemployers voluntarily published inflation-adjusted accounts, almost all of them at current cost, and in 1979, a year before the first mandatory CCA Standard, 62 of them voluntarily published CCA . See Appendix . 26 . `Monetary working capital' and `gearing' adjustments are measures of the notional windfall losses and gains in shareholders' purchasing power, but are irrelevant for income measurement and hence investment appraisal (see Sutton, 1984 ; and Archer & Peasnell, 1984) . 27 . Dividend cover is measured as the ratio of distributable profit to the dividends proposed .

147



n

b ti ~'

V

m z v X

C7

a y

Eighty-three major unemployers

Company

Fall in employment 1979-82

Total employment in 1979

(a) Companies using ccAin their management accounts : Babcock Intn'l 6,139 21,067 BICC 6,555 33,705 BOC 8,252 20,600 Bowater 5,725 23,178 Brit Aluminium 2 1,176 10,282 Brown Boveri Kent 1,089 4,247 Cape Industries 1,805 9,135 Delta Group 8,800 22,825 Distillers 1,775 19,900 Dunlop 19,000 44,000 Fenner 1,122 5,201 Ford UK3 9,600 76,000 GEC 9,654 155,000 Gestetner 1,050 4,244 GKN 31,933 72,542 Hawker Siddeley 10,600 43,000 IC' 22,100 89,400

Average valuation ratio'

0.45 0.69 1 .13 0 .33 0 .15 1 .05 0.25 1 .08 0 .05 0 .17 0 .46 0 .86 1 .49 0 .14 0 .70 0 .93 0 .82

Industry

MechEng Elctrncs Chemicals Pack & Paper Metals Elctrncs Bldg Mats Mech Eng Wns & Sprts Motor Comp MechHdlg Autos Elctmcs Office Eqp Motor Comp Mech Eng Chemicals

Published ccA in 1977 1979

London Brick Lucas maney Pearson Phillips Elctroncs3 Pilkington RHP SGB Tate and Lyle TI Thomas Tilling Tootal Unilever United Biscuits Weir Group

Totals

2,554 16,126 1,138 4,079 15,207 5,100 2,694 1,381 2,788 31,800 5,000 9,218 16,253 1,200 3,830

9,590 69,129 8,177 30,995 39,941 22,700 9,487 6,439 10,772 59,500 35,300 20,213 85,486 32,000 8,539

264,743

1,102,594

0 .04 0 .77 1 .03 1 .43 0 .64 0 .76 1 .15 1 .17 0 .77 0 .52 0 .90 0 .64 0 .45 1 .94 0 .65

Bldg Mts Motor Comp Bldg Mats Inds Hldgs Elctrncs Bldg Mats Mech Eng Constrctn Food Mfg Mech Eng Cnsrtn/Eng Textiles Food Mfg Food Mfg Mech Eng



0 0

n Company

Fall in employment 1979-82

Total employment in 1979

Average valuation ratio'

Industry

Published ccA in 1977 1979

'd I~, A V."

(b) Companies making abandonment decisions APv Holdings 2,129 AE 8,407 Birmid Qualcast 6,181 BL 72,236 BSC3 77,900 Carrington Viyella 11,843 Chloride 2,822 Coats Patons 6,527 Courtaulds 40,367 Gallaher 1,299 Glynwed 2,642 Hoover3 5,468 Imperial Group 16,700 John Brown 4,397 Johnson & Firth Brown 5,256 LCP Holdings 1,460 Massey UK 3 6,593 Nrthn Engineering 4,808 Simon Engineering 1,972 Smiths Industries 4,362 Talbot 3 9,311 Vauxhall 3 4,808 Total 297,488

7,492 23,347 14,409 154,820 190,000 26,064 10,645 23,026 103,003 24,505 13,615 11,751 90,400 14,437 13,879 4,020 19,659 31,429 6,377 18,225 17,692 31,429 850,224

0 .90 0 .58 0.75 0 .87 0 .00 0 .20 0 .48 1 .24 0 .99 0 .23 1 .48 0 .00 1 .33 0 .29 0 .41 1 .02 0 .55 0 .43 0 .80 2 .52 0 .00 0 .00

Ind Plant Motor Comp Mech Eng Autos Metals Textiles Elctrcl Textiles Textiles Eng/Tobacco Metal Frmg Mech Eng Tobacco Mech Eng Metals Ind Hldgs Autos Elctrcl Constrn/Eng Mech Eng Autos Autos

n a y



Company

Fall in employment 1979-82

(c) Companies changing their technology Cadbury Schweppes 6,132 Croda Intnl 1,914 Ciba Geigy UK 2,873 DRG 6,076 Fisons 6,258 Glaxo 2,414 Hepworth Ceramic 3,350 Hoechst3 1,043 Kodak 3 1,310 Monsanto 3 1,600 Plessey 5,300 Rank Hovis 9,223 Reed Intnl 7,000 Rowntree 2,425 Smith & Nephew 3,462 STC 5,074 Unigate 3,200 Total 68,654

Total employment in 1979

Average valuation ratio'

29,029 6,727 10,771 19,496 10,959 15,602 10,600 6,121 10,496 4,400 38,326 51,581 53,000 22,425 10,664 27,956 39,000 367,153

1 .24 1 .00 0 .30 0 .81 4 .84 8 .72 1 .21 1 .08 1 .99 0 .01 2 .46 1 .04 1 .07 1 .57 4.26 1 .89 1 .11

Industry

Food Mfg Chemicals Chemicals Pack & Paper Hlth & Hshld Hlth & Hshld Bldg Mats Chemicals Photographic Chemicals Elctrncs Food Mfg Pack & Paper Food Mfg Hlth & Hshld Elctrncs Food Mfg

Published ccA in 1977 1979

*4

+4



Ln t4

Company

Fall in employment 1979-82

Total employment in 1979

Average valuation ratio'

Industry

Published ccA in 1977 1979

(d) Contractors BTR

Costain Davy Corporation Fairclough Cnstrn French Keir IN

John Laing Powell Duffryn Tarmac Thomas Ward Trafalgar House Wimpey Totals Grand Totals

2,302 1,011 2,834 2,510 1,619 7,991 5,400 3,232 4,122 1,299 10,807 10,000 53,127 684,012

15,131 5,587 11,192 9,437 5,458 26,553 18,300 10,625 23,688 6,716 26,967 27,000 186,654 2,506,625

9 .73 1 .26 0 .30 0 .00 0 .02 1 .01 0 .75 0 .75 2 .90 0 .12 1 .62 0 .70

Othr Ind/Mats Constrn PInt Cnstrn Cnstrn Cnstrn Metals Cnstrn Ind Hldgs Cnstrn Cnstrn Ind Hldgs Cnstrn

*4

1 . Datastream averages for data available from 1979 to 1983 . Ourvaluation ratios are calculated as the sum of the year-end stock market value of equity and the book value of long-term debt, divided by thenet current cost of total assets . Strictly, debt should be measured at its market value (Edwards & Bell, 1965), but because interest rates between 1979 and 1982 were at record levels, the market values of debt for many of our companies was likely to have been below their book values as most long-term debt was raised before 1974 . Consequently, our estimates are likely to be overestimates of some of our companies' true valuation ratios . 2 . British Aluminium was a subsidiary of the Ti group, hence there is a small element of double-counting in our totals . 3 . To make the ccA results of the nine companies not listed on the stock market comparable to the listed companies, we have estimated valuation ratios for the unlisted companies as a linear relationship between the average valuation ratios and the average current operating rates of return for the listed companies in our sample, i .e . VRj = 0 .64 + 0 .15(CORj), where : VRJ = the average valuation ratio for company j ; CORj = the average current operating return on the replacement cost of the net total assets of company j . Some of the unlisted companies had such large negative average current operating returns that the equation estimated a negative valuation ratio . In practice valuation ratios have a lower bound of zero, and this is the value at which these companies are included . 4 . ccP Accounting . Sources : Datastream, Extel, Company Accounts .

Inflation accounting Accounting Standards Steering Committee, ED8, `Accounting for Changes in the Purchasing Power of Money', January 1973 . Accounting Standards Steering Committee, `Provisional Statement of Standard Accounting Practice No . 7, Accounting for Changes in the Purchasing Power of Money', May 1974 . Accounting Standards Steering Committee, ED18, `Current Cost Accounting', 1976 . Accounting Standards Steering Committee, `Inflation Accounting - An Interim Recommendation by the Inflation Accounting Steering Committee', 1977 . Accounting Standards Steering Committee, `Statement of Standard Accounting Practice, SSAP16, Current Cost Accounting', 1980 . Accounting Standards Steering Committee, ED35, `Accounting for the Effects of Changing Prices', 1984 . Archer, G .S .H. & Peasnell, K . V ., Debt Finance and Capital Maintenance in Current Cost Accounting, Abacus, December 1984 . Archer, G .S .H . & Steele, A . `The Implementation of SSAP16, Current Cost Accounting, by UK Listed Companies, in Carsberg & Page (eds), Current Cost Accounting : The Benefits and Costs, ICAEW, 1984 . Armstrong, H . & Taylor, J . Regional Economic Policy and Its Analysis, Philip Allan, 1978 . Bank of England Quarterly Bulletin, `Economic Commentary', June 1973 . Bank of England Quarterly Bulletin, `Economic Commentary', December 1974 . Bank of England Quarterly Bulletin, `Inflation and Management Accounting', June 1980 . Beaver, W . H . `Accounting for Inflation in an Efficient Market', in `The Impact of Inflation on Accounting : A Global View', International Journal of Accounting, 1979 . Beaver, W .H . Financial Reporting - An Accounting Revolution, PrenticeHall, 1981 . Bonbright, J .C . The Valuation of Property, Vol . 1, McGraw-Hill, 1937 . Brealey, R .A ., Byrne, J . & Dimson, E . `The Variability of Market Returns', The Investment Analyst, December 1978 . Bryer, R .A ., Brignall, T .J . & Maunders, A .R . Accounting for British Steel - A Financial Analysis of the Failure of the British Steel Corporation 1967-80, and Who Was to Blame, Gower Publishing Co ., 1982 . Bryer, R .A . & Brignall T . J . `How BSC Lost Its Surplus', The Accountant, 11 November 1982 . Bryer, R .A ., Brignall, T .J . & Maunders, A .R . `The Origins of Plant Closures', in H . Levie et al (eds), Fighting Closures, Spokesman Books, 1984 . CBI, `Inflation and Company Accounts - An Interim Report for Discussion', January 1973 . CBI, `Accounting for Inflation - Final Report of the Committee on Inflation and Accounts', September 1973 . Dimson, E . & Brealey, R .A . `The Risk Premium on UK Equities', The Investment Analyst, December 1978 . Edwards, E .O . & Bell, P .W . The Theory of Measurement of Business Income, University of California Press, 1965 . Gibbs, M ., Percy, K . & Saville, R . 'Sandilands and the Effects on Dividends', Accountancy, August 1976 .

References

153

Capital & Class 154

Griffin, P . A . Usefulness to Investors and Creditors of Information Provided by Financial Reporting: A Review of Empirical Research, Financial Accounting Standards Board, 1982 . HMSO, `Inflation Accounting - Report of the Inflation Accounting Committee', Cmnd 6225, September 1975 . HMSO, `Committee to Review the Functioning of Financial Institutions', Cmnd 7937, June 1980 . HM Treasury, `Economic Progress Report', July 1979 . ICAEW, `Accounting for Stewardship in a Period of Inflation', August 1968 . ICAEW, `Inflation and Accounts - Discussion Paper and Fact Sheet', Accountancy, September 1971 . Jenkinson, N .H . `Investment, Profitability and the Valuation Ratio', Bank of England Discussion Paper No . 17, 1981 . Jones, F .E . `Our Manufacturing Industry - The Missing £100,000 million', National Westminster Bank Review, May 1978 . Kay, J .K . `Accountants Too Could Be Happy in a Golden Age : The Accountant's Rate of Profit and the Internal Rate of Return', Oxford Economic Papers, XXVII, 1976. Kay, J .A . `Inflation Accounting - A Review Article', The Economic journal, June 1977 . Keane, S . Stock Market Efficiency - Theory, Evidence, Implications, Philip Allan, 1983 . Lee, T . A . `The Neville Report on cCA : Confusion and Simplicity', The Accountants' Magazine, October 1983 . Lev, B . `On the Adequacy of Publicly-Available Financial Information for Security Analysis', in Abdel-Khalik & Keller (eds), Financial Information Requirements for Security Analysts, Duke University, December 1976 . MacKay, D .I, Sladen, J .P . & Holligan, M .J . The UK Vehicle Manufacturing Industry: Its Economic Significance, PEIDA, November 1984 . Markowitz, H .M . `Portfolio Selection', journal of Finance, 7 March 1952 . May, R . G . `Some A Priori Properties of Conventional and Current-Cost Income Numbers Vis-a-Vis Security Analysis', in Abdel-Khalik & Keller (eds), Financial Information Requirements for Security Analysts, Duke University, December 1976 . Perrin, J .R . `Inflation Accounting Is Not Economic Valuation' (editorial), journal ofBusiness Finance and Accounting, Spring 1976 . Pettigrew, A .M . The Awakening Giant - Continuity and Change in ICI, Blackwell, 1985 . Robinson, W . & Wade, K . `Unemployment, Scrapping and Factor Prices', Forecast Release, Vol . 9, No . 10, London Business School Centre for Economic Forecasting, 1 August 1985 . Ronen, J . & Sadan, S . `Classificatory Smoothing : Alternative Income Models', journal of Accounting Research, Spring 1975 . Ross, D . Why ccA, Gallery Press, 1980 . Scapens, R . W ., Southworth, A . J . & Stacey, G. H . Case Studies in Current Cost Accounting', ICAEW, 1983 . Society of Investment Analysts, `Inflation and Accounts', The Investment Analyst, May 1972 . Society of Investment Analysts, `Accounting for Changes in the Purchasing Power of Money', The Investment Analyst, September 1973 .

Inflation accounting Stamp, E . `Income and Value Determination and Changing Prices : An Essay Towards a Theory', The Accountants' Magazine, June 1971 . Stamp, E . 'Sandilands - Some Fundamental Flaws', The Accountants' Magazine, December 1975 . Sutton, T .G . `Physical Capital Maintenance in a Credit Economy', Accounting and Business Research, Autumn 1984 . Westwick, C .A . `The Lessons to be Learned from the Development of Inflation Accounting in the UK', Accounting and Business Research, Autumn 1980 . Whittington, G . Inflation Accounting - An Introduction to the Debate, Cambridge University Press, 1983 . Williams, K ., Williams, J ., & Thomas, D . Why are the British Bad at Manufacturing? Routledge & Kegan Paul, 1983 . Williams, N .P . `Influences on the Profitability of Twenty-Two Industrial Sectors', Bank of England Discussion Paper No . 15, 1981 .

155

James Barlow and Mike Savage The politics of growth : cleavage and conflict in a Tory heartland Have the economic and political strategies of Thatcherism created two nations? By examining changes in the structure of employment in Berkshire and relating them to recent developments in the patterns of housing provision Barlow and Savage argue that even within the prosperous counties of the South East social divisions are widening . They 156 conclude with a reminder to the leftthere are social needs to be met in the traditional Tory strongholds such as the leafy lanes of Berkshire .

• IT IS now widely recognised that Thatcherism is not simply an economic project, but is also concerned with a profound political restructuring . This primarily involves the creation of a'propertyowning democracy' . Unlike previous brands of Conservatism which emphasised the need for people to be committed ideologically to the existing society (through the bonds of nation, family, and tradition), Thatcherism prioritises the need to give (some) working-class people a material stake in capitalist society, by the extension of owner-occupation and share-holding . Jessop (1982) characterises this as a `two nation' rather than a `one nation' strategy, where the aim is not to win over the entire population, but merely `the strategically significant factors' (Jessop, 1982 : 244 ; see also Dickens et al, 1985 : Ch . 4) . In this respect the manifest deprivation present in certain inner-city areas, and in the `peripheral regions' is of little concern, especially since population decline here has meant that Conservative governments can be safely elected without having any Mrs from these areas . By focusing on the problems of the `depressed' areas, the left has not adequately come to terms with analysing the contradictions of Thatcherism in its own heartland : the `rural' and suburban areas of the South of England . There is nothing new in suggesting that certain `affluent' groups of the working class have been conservatised by their relative prosperity . This issue was most recently addressed in the



Politics of growth 157

1960s and generally found to be wanting because the affluence of some workers had been achieved mainly through class-based forms of trade union and shop floor struggle and hence was still in some ways dependent on the defensive organisations of the working class . The reason the issue needs to be posed again today is that the affluence of some working-class groups may no longer be so dependent on trade unions or working-class collective organisation more generally . It may be more dependent on `fitting in with the company', and as Pahl (1984) and others have argued, living in an owner-occupied house where money can be made simply by trading up, or by entrepreneurial bouts of DIY . If this process is occurring it is of great significance in considering socialist strategy, yet our understanding of these changes is as yet limited . In this paper we will examine recent economic and social change in Berkshire to investigate the changing character of inter-class, as well as intra-class relations, in order to discuss the effects of these on political alignment . Berkshire is a particularly interesting case because it is frequently trumpeted as a Thatcherite success story . Even in the context of the South East of England, less hard hit by unemployment, it has apparently excelled in recent years . As The Economist wrote, `Berkshire was the last bit of Britain into the recession . Signs are it will be the first out . . . Britain needs more Berkshires' (The Economist, 31/1/82) . Furthermore there do appear to be more important political changes within the county, although we will show that these are not only affecting the Labour Party, but also the Conservatives . The Labour Party, based on the organised (usually white male) workforce, has suffered some loss of support, but the apparent Conservative strength in the area is deceptive since it is highly unstable, being based on an increasingly fragile alliance of capitalist, landowning and residential interests, which are becoming more fragmented in the context of economic change . Although within the labour market there is evidence of an affluent group of manual workers, it is erroneous to see them as natural Thatcherites, for their jobs are still insecure, and their housing market position frequently difficult .

A history of economic change Berkshire remained a predominantly agricultural area well into this century and although Reading, its main town, had a considerable industrial sector (based on the famous trio of beer, biscuits and bulbs), this was also based on agricultural produce . From the 1930s, though, industrial growth has been almost constant . In the 1930s, at a time of massive industrial decline

Restructuring the economy

Capital & Class

158

among the staple manufacturing industries of coal, textiles, iron and steel, and shipbuilding, the then small town of Slough prospered . The Slough Trading Estate Ltd perfected a new scheme to develop industry, modelled on that pioneered at Trafford Park in Manchester, whereby a private company would provide land, factory premises, energy and even housing for employees, renting out these facilities to private companies . Labour was provided by government transfer schemes which relocated workers from the `distressed areas' . No less than 16,000 came from Wales (PEP, 1938 ; TUC, 1938) . This system suited perfectly the requirements of a number of multinational firms moving into Britain, who knew little about the precise nature of specific sites and wished to move into ready-made factory units . Many of these have since become household names : Berlei, Black and Decker, Citroen, Gillette, Mars and Aspro being the best known . Most firms were fervently anti-union, and in the 1930s only about 1,000 of the 20,000 workers on the estate were union members . Many pioneered new systems of management, including the use of the Bedaux system of scientific management, and the general casualisation and deskilling of labour (TUC, 1938) . This expansion continued after the Second World War with the main focus switching to the New Town of Bracknell, one of the most successful of its kind in attracting employers (most of them decentralising from London) . Throughout this period labour shortages for all grades of labour were endemic . Many firms made special efforts to keep female labour, Berlei in Slough, for instance, offering free beauty treatment . Although Slough in particular had well above average rates of female participation in the workforce this was inadequate for firms' labour requirements, and in 1962 Mars recruited directly in Tyneside, South Wales and Belfast . Even this proved ineffective and many firms welcomed the employment of blacks . Some 2,000 `foreign' workers arrived in 1962, and in-migration has continued to the present (Slough Observer, 6/5/83) : 20% of Slough's population, and 10% of Reading's, is non-UK born (see Table 1) . This tight labour market and the close proximity of jobs (about 30,000 within a square mile or so) weakened workers' collective organisation, since any discontent could be met by leaving and finding a job elsewhere . One man interviewed' related how he had worked at 13 jobs in a week at one time . Many firms were forced to adopt paternalist strategies to keep their workers, with the use of pension schemes, works clubs and private medical care (mainly through the unrivalled Slough Occupational Health Centre) . The result was that workers, although not highly skilled, were given corporate benefits and were relatively well paid . It is against this backdrop that more recent changes must be



Social structure of Berkshire, 1981

1 GB

Berkshire Bracknell Newbury Reading Slough Windsor Wokingham

4 .5 7 .7 8 .2 7 .9 6 .1 3 .1 8 .8 11 .8

of population in households with head in sc 2 3.1 3.2 4 5 18 .8 25 .4 25 .7 26 .2 18 .4 14 .7 29 .9 35 .7

9 .1 10 .3 11 .7 10 .6 10 .9 8 .5 10 .1 10 .2

26 .2 24.1 25 .0 25 .5 26 .1 29 .2 21 .8 18 .0

12 .2 10 .9 9 .7 9 .6 12 .1 19 .2 9 .0 6 .8

4 .1 2 .7 2 .1 2 .4 3 .7 4 .2 2 .3 1 .5

% women in employment % of pop single born outside UK married 6 .3 9 .1 6 .2 5 .1 10 .0 19 .7 9 .0 5 .8

54 .2 57 .5 59 .1 54 .2 58 .5 60 .1 57 .5 56 .5

60 .5 65 .2 66 .7 62 .8 66 .5 66 .8 66 .8 61 .2

sc = social class (Class 1 = professional, 2 = intermediate non-manual, 3 .1 = skilled non-manual, 3 .2 = skilled manual, 4 = partly skilled manual, 5 = unskilled manual) . Does not total 100% since balance = not economically active . Source: Census of Population, 1981 .

160

assessed . If Slough pioneered the use of deskilled, mass production methods in multinational firms in the 1930s, today the emphasis has changed dramatically . The future is seen as being in the professionalised, exclusive world of the small 'hi-tech' firm . Growth in this sector started in the 1950s and was based initially on large firms such as Hewlett Packard, Racal, Ferranti, Honeywell, Digital, and ICL, which were mainly based in Bracknell (Morgan & Sayer, forthcoming) . Recently, though, there has been an increase in small indigenous hi-tech firms, often set up by previous employees, which spread out over other parts of Berkshire . By the 1980s about 30,000 people, slightly over 10% of the workforce, were employed in the hi-tech sector . We should not get too carried away by the hi-tech rhetoric, however . Recent research (Champion & Green, 1985) suggests that the main indicator of economic growth in British towns is the number of workers employed in financial services (a considerable source of demand for hi-tech products, of course), and here again Berkshire has benefitted . Reading, following a wave of office decentralisations from London in the 1960s and 1970s, is now the third largest insurance centre (after the City and Croydon) . `Private services' (which includes some hi-tech activities such as software engineering) are in fact the most dynamic sectors of Berkshire's economy : 37,000 new jobs were created between 1971 and 1981 (a growth rate of 46%), more than are employed in the entire hi-tech sector (RCB, 1985d) . Furthermore much hi-tech growth is dependent on the existence of government military establishments in the area and is therefore susceptible to swings of government policy . The result of these trends was that employment rose in the 1970s by 2% a year in Berkshire, against only 1 .3% in the rest of the relatively buoyant South East region . The recession appeared to pass Berkshire by as employment grew from 310,000 in 1976 to 340,000 in 1984 . Yet it is important not to be carried away by the visions of a hi-tech utopia prevalent in some quarters . Many of the jobs in these firms rely on mainly male professional workers, and offer few opportunities for local workers . Only 12% of jobs in the hi-tech sector are for unskilled labourers, as against 29% in other Berkshire firms . No less than 55% are for professional or managerial workers (RCB, 1985c) . A number of firms have reported skill shortages and advertise nationally for certain vacancies . The emergence of these firms has led to dramatic land price rises, with industrial land in Slough now being sold at over £ 1 .5m an acre, the most expensive in the country outside London . As this happens the temptation for older manufacturing firms to sell up and move elsewhere is considerable . Between 1979 and 1983 unemployment rose from 2% to 8%, and 75% of the jobs lost

were in manufacturing . The biscuit empire of Huntley and Palmers (taken over by Nabisco) which once employed over 5,000 in Reading, was characteristic in moving its production from Berkshire whilst leaving its corporate HQ in Reading . The brewing firm of Courages moved from its prime site in central Reading in order to cash in on revenue from redevelopment (Reading Chronicle, 12/3/82 ; Reading Evening Press, 21/3/84) . Slough Estates Ltd (who have expanded to take over Sutton's Seeds' old site in Reading) have raised rent levels considerably in recent years and have the reputation of being a `harsh' landlord . Some of the firms moving out are those which have existed in Berkshire since the 1930s . Thus Black and Decker are moving distribution to Northampton, and Berlei are moving warehousing to Wales . By 1984 unemployment in Reading was 11 .4%, only a little below the national average, and there are large numbers of long-term unemployed, forming a third of the total, which has fallen particularly on one parent families . 2 Detailed data on Slough (Census, 1981) shows that in 1981 only 5 .5% of the heads of `married couples' households were not economically active, but no less than 44% of the heads of households of one parent families were not economically active (i .e . discouraged from the labour market) . Jobs do, of course, remain . There are still about 24,000 jobs on the Slough Trading Estate, after a peak of about 30,000 (while Trafford Park in Manchester having employed 90,000 at one time now only employs 30,000) . But the character of the jobs is changing . Many of the old `core employers' have gone (e .g . Huntley and Palmer's and Sutton's Seeds in Reading, High Duty Alloys and GEC McMichaels in Slough), or have reduced their workforces . Mars, who kept unions out by conducting a yearly survey of wages paid at all the firms in Slough and then paying 10% over the going rate, have reduced their workforce from 7,000 to just over 3,000 . The older core staff are in some cases being dispensed with . Mars are increasing the numbers of workers on three-month contracts . Employment in sub-contracting engineering shops has, however, been buoyant . It is among these peripheral employers that more jobs are to be found, and we have been told that wage levels are now higher in sub-contracting firms than in core firms . 3 Skilled workers with craft backgrounds are also becoming highly sought after : 82% of firms who recruited in 1985 had difficulty in finding them (EBSBCC, 1985) .

Who has gained? To summarise, the main beneficiaries of recent economic change tend to have been professional workers . Evidence of wage

161

N

N

Employment change in services 1971-1981 1

Employers/ managers

GB Bracknell Newbury Reading Slough Windsor

1 .4 3 .1 5 .5 2 .7 2 .3 2 .8

Professionals

-0 .0 0 .1 0 .0 0 .4 -0 .4 0 .7

Intermediate

Junior

Skilled

Semi-skilled

Unskilled

non-manual (N-M)

N-M

manual

manual

manual

2 .3 2 .7 0 .7 2 .3 1 .1 2 .1

-2 .3 1 .6 5 .1 -0 .7 2 .0 -1 .9

1 . % change in resident service employees by socio-economic group .

Source : Green (1985) .

-0 .6 -0 .6 -3 .0 -0 .7 0 .0 0 .6

0 .2 -1 .3 -3 .5 -1 .4 1 .2 -4 .1

-0 .9 -1 .8 -3 .3 -1 .5 -1 .8 -0 .4

Politics of growth

differentials shows growing polarisation between manual and non-manual incomes : in 1976 full-time male non-manual workers on average earned 23 .9% more than full-time male manual workers ; by 1985 the figure had risen to 29 .8% (New Earnings Survey, 1976; 1985 : unfortunately there are no comparable figures for women) . Nonetheless there is polarisation between workers . In the 1960s firms needed many types of labour, and corporate benefits were extended throughout companies' full-time workforces . Today it is only key workers who are likely to be so favoured, and these are more likely to be skilled (and hence white) males . The expansion of private services has also only required particular forms of labour . Green (1985) shows that although employment in services grew twice as fast as the national average between 1971 and 1981, much of the increase was in the managerial ranks (see Table 2) . The number of skilled manual, semiskilled manual and unskilled manual workers in services actually fell in Berkshire between 1971 and 1981, in most cases more than the national average, while the numbers of employers and managers in services rose at over twice the national rate (Green, 1985 : Table IX) . Furthermore, Table 2 shows that there was increased polarisation within Berkshire : the biggest increase in employers and managers was in the select area of Newbury, whilst the numbers of manual workers fell least in Slough . This in turn was linked to the fact that much of the employment increase went either to male workers or female part-time workers, and that only in the declining public distribution sector was the proportion of female full-time workers increasing . Employment trends in services do not therefore appear to offer much hope and in any case, it is becoming more difficult to obtain planning permission for large developments . Recently the County Council turned down planning permission for a massive superstore on the grounds that the space needed to be conserved, while also observing that most of the jobs would not ease the unemployment problem as they would `only' go to women entering the labour market . This despite the fact that women also appear to have lost out in manufacturing . The position of women in the labour market is extremely complex, as Table 3 indicates . It is perhaps too simplistic to say that they have gained nothing : female participation rates are well above the national average, and there has been increasing employment of women in the buoyant service sector . Table 3 shows that in private sector services, however, employment growth has either been faster for men than women (in producer services), or the increase in full-time female employment has only been slightly higher than for men (consumer services and

163



n b A

nA

O

y W

Gender changes in service employment 1971-1981 1

Service Private production services Private consumer Public services Public distribution Private distribution

GB

male change Berks

+30 .0 +9 .5 +0 .6 -11 .6 -2 .8

+102 .7 +19 .0 +7 .4 -12 .9 +55 .9

% female change GB

Berks

+35 .9 +24.0 +23 .5 -0 .6 +16 .7

+68 .6 +48 .6 +14 .7 -10 .1 +76 .1

1 . % change in male and female employment in selected services .

Source: Green (1985) .

% full-time female GB Berks +23 .5 -0 .6 +15 .6 -1 .4 +3 .7

+65 .4 +24 .8 +13 .9 -1 .9 +64 .5



Politics of growth distribution) . Only in the public sector, which is now no longer increasing in numbers, has the proportion of full-time women been growing considerably faster than for men . It is in the sector now under the heaviest attack that women have in the past gained most . In recent years public sector employers have also faced competition for white-collar secretarial labour from private firms able to pay higher wages . While this may appear to improve women's position in the short term, allowing them access to relatively lucrative employment, this may well lead to women being less likely to train to move up the internal labour markets of public employers (which offers the best security and remuneration in the long term), but rather to the horizontal job moves which may not involve the possibility of long-term career advancement . 4 Economic growth has therefore mainly led to demands for professional labour, mainly filled through a `national' rather than `local' labour market . The prospects for manual workers are much worse, however, and there have been only limited prospects of moving into the expanding sectors . There is, however, a small group of generally male, white skilled workers who have unquestionably fared quite well in the labour market . Social divisions are therefore growing within the workforce : how are these divisions showing up in the housing market? Changes to the pattern of housing provision Just as Berkshire has been put forward as Britain's industrial hope, so its distinctive housing developments have marked a great departure from past practice . Superficially, it would appear that everyone must have benefitted from the remarkable expansion of the housing stock in recent years . Between 1976 and 1984 some 38,000 houses were built, a 17% increase in the housing stock (RCB, 1985a) . In March 1985, there were outstanding commitments for a further 23,000 houses, 79% of which were in Central Berkshire (RCB, 1985b) . Virtually all these have been built speculatively by private builders for owner-occupation, often on very large sites such as Lower Earley, where permission has been given for 1,000 houses . Developers, especially the large volume builders, have been very successful in pushing for largescale land release and in the early 1980s were able to use central government to override the conservationist local authorities : Michael Heseltine, then Secretary of State for the Environment, modified the Central Berkshire Structure Plan so that land for an extra 8,000 dwellings was made available (RCB, 1983 ; Fleming, 1984 ; Witt & Fleming, 1984) . These plans for a number of 'Heseltowns' have now been incorporated into the Stage 2 Struc-

165

Restructuring housing provision

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ture Plan proposals . In order to understand exactly what has been going on in Berkshire we need to examine some of the recent developments in housing provision in Britain, particularly those of the last 10 to 15 years (see Barlow, 1986 ; 1987) . Since 1945 housing provision has essentially relied on three main channels : new production by private builders (Ball, 1983 ; Dickens et al, 1985), new production by local authorities (Merrett, 1979), and state support for `consumption' of the existing stock (mainly, but not exclusively, in the form of tax relief for owner-occupation), with limited effects on the supply of new privately-promoted housing (Ambrose & Barlow, 1986) . Much of the `effective demand' for housing has traditionally been left to the private market, while for most of the post-war period `public' housing, provided by local authorites, has been the main way in which local housing needs have been satisfied . Beginning with the previous Labour administration, though, and consolidated and massively extended by the present government, the system of housing provision has undergone major changes . Cuts in public expenditure have led to a virtual halt in new council housebuilding, a large proportion of the public housing stock has been sold off (Forrest & Murie, 1984), and local authority repairs programmes have been hit by curbs on local government spending (Howells, 1983 ; Duncan & Goodwin, 1985 ; Bramley, 1984) . In effect, the supply of housing to meet local needs has been severely constrained and central government has left the private sector to cater for the population's housing requirements . In order to achieve this the private building industry has been given certain advantages, notably through a reduction in planning controls (Ambrose, 1986), and its profits are increasingly guaranteed by the state by the use of Urban Development and Derelict Land Grants (Barlow, 1986) . Two trends, however, are very distinct within the operations of the private housebuilders . First, there has been a geographical shift in the location of private sector housebuilding . The success of the housebuilders clearly depends on the existence of a `market', and recent trends in the activities of large speculative housebuilders seem to have reflected certain developments in the geographical and structural labour market . Notably, there has been a shift in the operations of the large housebuilders towards the prosperous South East and, to a lesser extent, South West (Barlow, 1986 ; Smyth, 1985) . Particularly important have been `rural' locations and small towns, which have seen substantial employment growth in recent years . Second, there has been a shift in the type of housing constructed, with a general move towards 'trade-up' property geared to an affluent, relatively mobile workforce such as that which

Politics of growth characterises many areas in the South East . One critical factor here has been the rise of a very affluent professional market, often based on financial service workers, for which the existing stock of houses is not `suitable' . It is these workers, often with access to cheap mortgages, which are of central importance in sustaining demand for 'trade-up' housing in the South East, although this is also a feature of certain other areas (e .g . Edinburgh, South Wales) (see Barlow, 1986) . Many housebuilders now perceive the market for this type of housing to be `regional' in the sense that it could be built in many areas with good accessibility, and is not tied to a specific localised market . Some housebuilders, notably Barrett, have reoriented their operations towards this market with considerable success : this company is reducing the level of first-time buyer sales in its operations from 70% in 1983 to 30% by 1987 . As the Financial Times recently reported (25/9/85), ` . . . the high volumes of cheap starter homes have been replaced with Tudor beamed houses for affluent trade-up buyers', the object being no longer crude market share but greater profits .

Emerging housing problems in Berkshire Hence massive housebuilding has not eased the problems of many Berkshire residents, since it is directed at high income earners, who may not be existing residentsof Berkshire . House prices have increased faster than in the rest of the South East, for instance by 19% between 1983 and 1984 . In 1984 the average price of all houses was almost £49,000 in Berkshire, compared with £40,000 in the rest of the South East and £31,000 nationally (RCB, 1985c) . The average weekly income of borrowers from the Nationwide Building Society in Berkshire in 1984 was £307 (more in some districts) (NBS, 1985), and it has been noted that the size of mortgage given to first time buyers is generally bigger than to previous owner-occupiers, the reverse of the national pattern (RCB, 1985c) . Another survey showed that two-thirds of purchasers of new dwellings in the county in 1983-84 were professional or managerial workers (RCB, forthcoming) . Clearly, then, the incoming professional workers of Berkshire have fitted the bill perfectly as the builders have turned to the high-income end of the market . As these changes take place the security offered by the public sector has been rapidly eroded by dramatic privatisation of public housing . Bracknell has been the most notable case here with large amounts of high quality housing built by the New Town Corporation being very popular among purchasers . 3,400 houses, almost one third of the public housing stock were sold off

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between 1981 and 1984 . As the stock dwindled, so the local council, under Tory control, restricted people's eligibility for council housing, and in 1981 applicants had to be aged over 25 before being placed on the waiting list . There has also been a very high rate of council house sales in Slough, although the Borough is still trying to maintain its general needs council housebuilding programme . Nor is this council housing being replaced . Berkshire already has the lowest proportion of public sector completions in the South East and a number of firms are now complaining about the lack of council housing (RCB, 1985d) . Areas of urban deprivation have been untouched by the changes taking place only a few miles away . As the Guardian (2/20/85) reported, 18% of the households in the Battle Ward in Reading lack their own bath or toilet . The County Council's `league table' of economically deprived wards shows a concentration in Reading, Slough and Bracknell . One of the central issues in the conflict between the conservationist Berkshire County Council, and central government is over the nature of the future demand for housing in the area . Housebuilders have in recent years been able to extract concessions over the release of land from central government, although the political will has now evaporated under pressure from backbench Tories worried about their `rural' majorities (see Barlow, 1986) . Nevertheless, Berkshire County Council was forced to make land available for private building in the early 1980s, with the government pointing to population projections showing considerable increases in household formation . As they recognise, however, almost half of these new households will be singleperson households, yet the type of housing which speculative builders are continuing to build generally remains family-based, suburban housing, not necessarily the sort needed for the type of demand now apparent in Berkshire . 5 This illustrates the failures of a planning system where only limited control can be exercised over the type of housing constructed by private builders, so although the builders have justified their demands for land in terms of the population projections for mainly small households, the sort of houses they build are not necessarily geared to this group . Many sections of the local population, especially single and young people, low-income households, one-parent families and so on are therefore finding it increasingly difficult to enter the housing market . In Berkshire only 14% of borrowers from the Nationwide were women, compared with 16% nationally (NBS, 1985) . More generally the focus on building large `family' houses on greenfield sites disadvantages those people (notably single parents and the unemployed) especially reliant on public services .

Politics of growth The fact that people are being shut out of the housing market here is indicated by the fact that in Berkshire only 34 .6% of Nationwide borrowers are first-time buyers, compared with 42 .1% nationally, and in the areas of major housebuilding, Wokingham, the proportion is as small as 22 .8% (fuss, 1985) . The special needs of the Asian population - related to the particular age and size structure of households, position in the labour market, cultural norms and so on - are also unlikely to be met . Residence qualifications, and (according to some of the people we have spoken to) informal colour bars, prevent immigrants getting access to much public sector housing in Slough . 1981 Census Data from Slough shows that the only two wards in Slough with more council housing than owner-occupied housing (Britwell & Wexham) have the smallest number of immigrantheaded households (5 .9% and 3 .4% respectively) . Hence blacks are often forced into poor-quality council housing or into the bottom of the owner-occupied market . More generally, very few purchasers of new housing are in manual occupations (RCS, forthcoming) . The high prices have also been hitting local employers . Almost a quarter of large firms in a recent survey (RCB, 1985d) indicated that they were experiencing difficulties in housing their workforce, with the cost of housing posing the main barrier (although equally many employees receive substantial allowances for purchase and/or removal expenses) . Of course, public expenditure is not being `saved' by the privatised system of housing provision in Berkshire . The local authorites have been hard hit by the need to service these new housing developments, yet are restricted by the current cuts in local government . It has been estimated (RCB, 1985a) that the capital cost of providing services for development already committed will be some £29 million p .a . up to 1996, with the government permitted maximum running at £25 million . In addition, Berkshire will need to find an extra £16 million in running costs and £31 million in loan charges every year . The county's outstanding loan debt is projected to reach £191 million by April 1987 (RCB, 1986) . Under the present constraints on local government expenditure it is unlikely that extra money will be forthcomin g . As the Structure Plan Review notes, `there will be even less scope for dealing with current problems . . . unless the government makes more financial resources available and/or developers meet a larger share of the costs of providing infrastructure needed as a result of development' (RCB, 1985a : para . 2 .3 .10) . Government expenditure targets, it adds, `have tended to bear harshly on counties such as Berkshire, where population is increasing' (op . cit ., para . 6 .2 .3) . Since private developers are being made to bear a growing

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share of infrastructure costs, it is not yet evident whether future growth is threatened by a lack of money for infrastructure investment . Nevertheless, it is clear that the existing infrastructure, particularly in transport, has been seriously deteriorating in recent years, especially as the rate of car ownership has now risen above one car per household . Yet the county spends only half as much money per head on public transport and roads as most Metropolitan counties (with which Berkshire is comparable given its population density) . Water and health services are also suffering from similar constraints, and cuts in the Thames Water Authority's capital spending have delayed improvements in some areas . It appears that the rapid recent growth in the Royal County of Berkshire has compounded rather than eased social tensions in the area . The conservationist lobby, anchored in local Tory parties, has become extremely vociferous in the area . Many of the most active of these are people who moved to a `rural' area under the impression that their development was the last which would be permitted, only to find housebuilders (having charged higher house prices for the `rural' location) pressing for yet more land release . As we will see in the next section, the mounting pressure for conservation is opening a number of significant gaps in the political spectrum within which the Labour Party could manoeuvre . We have so far examined the effects of Thatcherite policies on housing provision in Berkshire . One of the effects of this has been the emergence of a conservationist movement, a phenomenon well known in the USA (Saxenian, 1985) . We now want to discuss how the decline of public services and the emergence of widespread owner occupation is affecting political alignments in Berkshire, and to evaluate how the centrality of the conservation issue is related to party politics . Restructuring local politics

Generally speaking in both the labour and housing markets it is possible to detect a polarisation taking place . On the one hand there are expanding, lucrative jobs parallel to increasing numbers of casualised jobs and on the other hand in the housing market there is an emerging split between existing owner occupiers in a position to trade up benefitting at the expense of others . This polarisation cannot merely be seen in class terms, since not all manual workers have suffered (though on the other hand virtually all professional and managerial workers have benefitted) . Single people are those critically shut out by the housing market, given the virtual impossibility of paying a mortgage on one income . Yet it is by no means obvious that class cleavages are being undermined in formal politics .



Voting patterns in Berkshire, 1983 General Election

Seat G B

South England Slough Reading E . Reading W . Newbury Berkshire E . Wokingham Windsor/Maidenhead

% Labour

% Conservative

% Alliance

Labour

28 16 .3 36 .9 19 .4 19 .3 5 .6 13 .3 8 .0 11 .5

42 53 .2 42 .9 51 .6 52 .1 59 .3 56 .8 60 .4 58 .2

26 29 .9 18 .5 27 .4 28 .3 35 .0 29 .9 31 .6 25 .3

-4 .3 +4 .9 -3 .8 -3 .8 -11 .8 -14 .3 -2 .6 -8 .5

Residual Conservative

+3 .6 +0 .3 +1 .4 +6 .3 +7 .8 +11 .3 -1 .6 +6 .0

Bracknell is in Berkshire East . Residuals measure whether a party's performance is more (+) or less (-) than expected once the social structure of the constituency is accounted for . Source : McAllister and Rose (1984) . v'

o

cD y

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At first glance it seems that Labour has suffered dramatically in recent years . All seven Berkshire constituencies have Conservative MPs and only in Slough was Labour the second party in the 1983 general election (see Table 4) . Indeed the Labour vote has fallen dramatically in the last 10 years, from 31 % in October 1974 to a mere 16% in 1983, faster than the national shift . The County Council has also, after a period of minority rule between 1981 and 1985, recently been won by the Conservatives by a considerable majority . The local parties

Berkshire has never been a Labour stronghold, partly because of the general weakness of trade unionism in the area (especially in Slough), yet particularly in Reading and Slough it has been a considerable force . In Reading and Slough the weakness of trade unionism was to some extent counteracted by the development of an extensive base in working-class neighbourhoods, with a variety of sporting and recreational facilities, and a very high level of individual membership . Labour Party organisation was excellent, and pioneered comprehensive systems of canvassing . The decline of the Labour Party is most noticeable in Bracknell . Bracknell Labour Party never developed mass roots, which allowed it to be dominated in the 1960s by a number of right-wing figures . In the late 1970s Militant found it easy to gain a footing in the party, and all the Labour councillors resigned in protest and joined the SDP . This rift has fatally weakened opposition to the Tories, and in the 1984 district elections no Labour councillors were returned. In 1983 the Berkshire East constituency which includes Bracknell had one of the largest swings to the Conservatives in the country . In Reading Labour last won a parliamentary seat in 1966 and there has been a steady decline in their support, partly because of the way in which the neighbourhood bases of support have been undermined by the clearing of central Reading for office development . Even so they became the largest single party on the district council in the 1986 elections, with 22 of the 45 seats, and maintain a presence . In Slough, however, the party remains strong . Although Labour lost the parliamentary seat in 1983, they retain strong control of the District, and in 1986 held 23 of the 39 seats . Slough is now the only place in Berkshire where Labour remains the leading force . An indication of this is that in October 1974 22% of Berkshire's Labour vote was from Slough . By 1983 this had risen to over 28% . Clearly the problem for the Labour Party has been to straddle

Politics of growth the polarisation between the affluent working class in employment and those who have failed to benefit from new development . As it stands this analysis is perhaps too glib as can be seen by contrasting the fortunes of the Labour Party in Slough and Reading . In Slough the Labour Party has been a strong defender of public services, especially housing . In the 1970s the Labour Council kept up extremely high levels of rent subsidy, so that whereas nationally council tenants paid 55% of their rent, in Slough (despite its relative affluence) they only paid 40% (Slough Observer, 20/6/75) . They have raised local rates from 5p in 1983/84 to 22p today, and in 1984 refused to raise council rents or subsidise the General Rate Fund from the housing revenue account (Slough Observer, 2/3/84) . On the other hand Reading Labour Party are more moderate in their outlooks yet it is in Reading rather than Slough that Labour fortunes have fallen . It is by no means clear that a strong programme supporting public services is a liability . The reasons for this may well be that existing working-class owner-occupiers, even if themselves in secure employment, still depend on public services . This partly reflects the fact that it is their children who are most likely to be shut out of the housing market and hence will stay at home unless there is council accommodation . In the later 1970s Slough saw a considerable National Front following, with their candidates winning about 5% of the vote in the 1977 local elections . In an area where house prices were booming, and the housing situation of the working class under pressure, many whites responded to right-wing calls for the curbs on immigration . Husbands (1983 : 109) notes that National Front supporters in Slough tended to be more concerned about the black competition in housing than in most other comparable areas of Britain . Fascist support has declined since the 1970s but tensions over race persist within the Labour Party : in 1984 black independent Labour candidates stood against official Labour ones (with the ironic effect of taking away the ethnic support of an Asian official Labour Party candidate, helping to prevent him winning in a safe Labour seat) . Nonetheless the Labour Party has attracted the support of many blacks, and indeed in 1985 Slough was the first borough in Britain to have a black woman mayor . Survey evidence suggests that blacks are far more enthusiastic supporters of the Labour party than whites . 7 The Conservatives and the conservation issue The Conservative Party is also being dramatically affected by these changes, which could be exploited by a keen opposition . The principal rift is over conservation, an issue which divides

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rather than unites the Tory lobby . All three political parties now agree that some form of control is needed, and although there is some disagreement about how and where the reduction should occur the consensus is that growth should be limited in central Berkshire . The recent Structure Plan Consultation Document argues that too much land has been released . The approved strategy is now to `preserve the rural character of the County as a whole and to direct such development as is necessary to those areas which can best accommodate it and where services can most easily be provided' (RCB, 1985a : para . 4 .2 .1) . (The concern with preserving 'rurality' is paradoxical given that by the year 2000 Berkshire will be the most densely populated shire county in the South East, at current rates of growth .) This does not square with the demands of the housebuilders, however, who argue that the rapid house price inflation in the South East is the result of land shortages and that were they allowed to build on bigger sites they could cross-subsidise prices by building a wider range of house types . As we have seen over the last few years the builders, the planners in the counties of South East England and the Department of the Environment have been arguing over future housebuilding needs and the supply of land . Berkshire has been a prime battleground . The housebuilders have been actively lobbying the DOE for revised estimates of future population change . Yet most studies show that DOE projections have been based on faulty assumptions about rates of household formation (these have failed to take into account the reductions caused by the recession) . 8 The planners in Berkshire argue that the rate of population growth will be primarily determined by their planning policies, and herein lies the source of dispute . Further, there is in any case probably an excess of land available for housing development, given current building rates . A recent report by SERPLAN 9 argued that supply exceeded demand by some 35% in Berkshire, and 17% in the South East as a whole (excluding London) (SERPLAN, 1984) . Apart from questioning the population forecasts the housebuilders have argued that such county-wide estimates of land supply fail to identify local imbalances in supply and demand . A report by a firm of City economic consultants argues that there are two types of area where demand exceeds supply : rural areas (because of strong conservationist movements) and `high profile corridor towns' . Residential interests are strongly opposed to further development, fearing that their `place in the country' which they bought under the belief that there would be no further development, is being jeopardised by renewed demands for land release . As a result it is the Tory MPs, especially Andrew Mackay, the MP

Politics of growth for Berkshire East, who are most active over this issue . Mackay recently had the support of 85 Tory NIPS in asking Patrick Jenkin, then Secretary of State for the Environment, to think again about giving land to builders in Berkshire (Sunday Times, 10/3/85) . Yet other traditional Tory groups have supported development . These include the farming and landowning lobby . The Sunday Times (2/1/83) reported that `the farmers and the landowners can hardly wait (for development) . Some 52 have already written to the County Council to offer land' . The most recent instance of this is the case of some farming brothers, formerly Reading's foremost milk suppliers, who have recently formed themselves into a consortium to develop a £150 million science park (Reading Evening News, 8/6/84) . Nor does the idea of conservation appeal to the employers, who are worried about high house prices affecting wage demands . The East Berkshire and South Buckinghamshire Chamber of Commerce and Industry, the fifth largest Chamber in the country, which represents the interests of manufacturing in the area supports further housebuilding, and argues that there is a chronic shortage of rented accommodation . One official went out of his way to condemn the government regulation whereby councils can only use 20% of the receipts of council house sales to buid more council accommodation .' 0 This situation is getting worse as labour shortages in particular sectors become more apparent . The Chamber stated in September 1985 that the labour shortages for skilled manual workers were the worst ever, with 80% of firms looking for these workers having difficulty finding them (EBSBCC, 1985) . Furthermore, Tories in local authorities have been forced, despite their own stated policies, to support development on local authority land in order to ease their own financial shortfalls . The most notable case of this was when Berkshire County Council moved to its new £34 million site at Shire Hall, leaving its old prime sites in central Reading . Since the most profitable use for this land was in office development, the County Council supported an application for 350,000 square feet of offices from a financial consortium which would have been worth over £12 million . In order to ensure this went ahead it even arrogated planning permission to itself . This led Reading Civic Society to accuse the County Council of `acting like the worst kind of speculative developer' (Reading Evening Press, 9/11/81) . Eventually the protest forced the County Council to return planning permission to the District, and a modified scheme went ahead (Reading Evening Press, 1/7/82) . This is not unique . On being told by the government that it had to sell its assets, the Bracknell Development Corporation also went on a spending spree in

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1980/81 (Turok, forthcoming) . A recent economic consultant's report on Berkshire County Council has also earmarked a number of sites for possible sale . The problem with conservation is that it is an essentially contradictory policy . Tight development control only tends to shift growth around the county, not necessarily to actual places of need . Slough, for example, with some of the more acute housing problems, has Berkshire's largest council housing programme and has its own land, but it is restricted by the Green Belt . Furthermore the increasing emphasis on development in small 'infill' sites, coupled with the limited ability of local authorities (under the current planning system) to have a say in the type or price of new owner-occupied housing will mean that house prices will continue to rise rapidly, barring even more of the local population from access to new housing . County planners agree that the conservationist movement has not come to terms with a basic problem . While being opposed to housing development, many councillors are prepared to see further economic development . Yet such development will be geared to professional labour markets, and will hence be likely to bring in a further influx of people needing somewhere to live . This will lead to an even more dramatic escalation of house prices (see Saxenian, 1985, on these same problems in the us) . The ending of large-scale housebuilding will also throw a large number of building workers out of employment, intensifying the unemployment problem for manual workers . Berkshire is a key site for these conflicts because of the existence of an affluent middle class there, yet it is by no means unique . Hence we can see that the restructuring of Berkshire is not only affecting the Labour Party, but also the Conservatives . These problems can be summarised as follows . There has been a growing disharmony between the bulk of Tory voters (keen on conservation) and the main Tory interest groups (landowners and employers, who are keen on further development) . The further contradiction in the Tory conservationist movement is that any attempts to restrict growth will involve considerable public intervention (in terms of planning controls) to prevent housebuilders and office developers building here . The Conservative Party is hardly best placed to achieve this, given its supposed support of laissez-faire politicies . A number of possible developments may result . Residential interests may become increasingly detached from the Conservative Party, as has happened in Walton-on-Thames, in Surrey (The Guardian, 12/5/ 86) . The Alliance may pick up defecting Tory voters in the middle-class areas, and Labour may pick up votes in the towns . The Alliance did well in Berkshire in 1983 (outside Slough) and

Politics of growth 177

has a strong base of support in Newbury, where Conservative councillors are keen to see growth take place in the future (diverting it from their own strongholds in central Berkshire), a development which will be likely to stoke up conflict in the future . In fact what seems to be apparent from Berkshire is the extent to which the Labour Party's position as a party of depressed urban areas may be to its advantage, given the general desire of residents here to divert growth from Berkshire . The remarks of the Labour leader of the Berkshire County Council on Heseltine's decision to allow further housebuilding in the county were widely supported . `The new developments at London docklands', he stated, `are the proper place for these houses' (Sunday Times, 2/1/83) . More recently Andrew Mackay (MP for Berks East) urged Patrick Jenkin `to reconsider the provision of land for housing in the SE to take account of the need to give a boost to economic activity in the regions, especially the North and Midlands, to increase the use of land lying waste in the conurbations, especially the inner cities' (Sunday Times, 10/3/85) . By late 1985 there was a growing resistance in the Tory Party to further greenfield land release (compounded by mounting concern over the `inner city problem') . As Kenneth Baker, the Environment Secretary, said to the House-Builders' Federation, `People tell me to call a halt to it, especially in the south-east, and neither local nor central government can ignore the groundswell of opinion against the scale of development of the recent past' (Financial Times, 14/12/85) . The fact that there are massive local variations in Britain's economy and polity is now a well documented fact (e .g . Massey, 1984 ; Urry, 1981 ; Johnson, 1985) . Consider the work of Thorns (1982) . Thorns argues that there is a reciprocal relationship between labour market and housing market position, so that location in a depressed region of Britain simultaneously means that there are increased chances of being without a job, and also that there are fewer chances of gaining capital through house price inflation . Furthermore people are becoming locked into particular areas . Because house price inflation is greater in prosperous areas it is not possible for unemployed workers to move from depressed to prosperous regions in search of a job, since they cannot afford to buy a house in these areas ." The implications of this argument are that material wellbeing is dependent not only on what you do but where you do it . Localities are in themselves becoming a basis for stratification . Yet such an argument has only partial truth . As we have shown, it is not correct to see everyone in Berkshire benefitting from

Conclusions : Mrs Thatcher's utopia?

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recent development ; rather the people who have benefitted above all are the relatively mobile professional and managerial workers . In short, most people are being increasingly locked into their `locality', wherever they live, but alongside these are a small number of high-flying, affluent, professional workers, who exhibit high levels of job and residential mobility, and this is the main group who have benefitted from recent trends . In this context, the notion that working-class owneroccupiers are benefitting from expansion needs to be treated with great care . Although capital gains can be made from housing, this is not disposable income in most cases . It is of little use for people in a terraced house in Reading to know that their house is worth £40,000 (compared with £20,000 in a northern conurbation), if they cannot realise this money . This problem is especially acute for young people . It is becoming increasingly difficult to both enter the housing market, or to obtain public accommodation . Since the main means by which people can actually make money out of housing is by trading down once their children have left home, the fact that the children of working-class people simply have nowhere to go, adversely affects the potential economic gains from their parents' point of view . It is by no means clear then that the interests of working-class owner-occupiers should be against public rented housing . 12 The way the local population is responding to all this is complex . At one level there is a broad coalition over housing provision, in the sense that there have been demands for more cheap and/or council housing by many employers and certain political groups . There is also, as we have seen, a need for the creation of jobs geared towards the unskilled and unemployed . It is therefore not simply a question of being for or against growth, but rather a question of getting the right sort of growth . Recent statements by the local Labour Party suggest some recognition of this, and there is a potential for strong campaigning which may win over wider groups . This all shows, of course, how complex the alliances can be in areas where new employment and housing development takes place on an existing old-established social structure such as Berkshire . The issues in this area are perhaps less clear-cut than in `Silicon Valley' in California, where development to some extent took place from scratch and there is little unemployment . Here it has been easier for a strong, clearly defined anti-growth lobby to emerge (Saxenian, 1985) . In this sense, the social and political alliances in Berkshire probably has more in common with the Route 128 corridor around Boston where new growth was 'imposed' on an already-developed area . It is important that the left does not get drawn into a



Politics of growth

179

territorial politics whereby social needs of all groups are assumed to reflect the relative prosperity of that area . It might be argued that the position of the unemployed or casualised workers are much the same everywhere, and indeed may be rather better in the old conurbations because of the public funding of leisure, transport and housing, and the possibility that there is a more supportive social environment in these areas . A future Labour government committed to greater public spending should recognise that there are needs to be met, even in Berkshire's leafy lanes . Acknowledgement This research was undertaken as part of an ESRC-funded programme on `Economic Restructuring, Social Change and the Locality' based at the Urban Studies Division, University of Sussex . See Savage et al (1986) for further details . Thanks to members of the programme team and to the Capital & Class collective for helpful comments on earlier drafts .

1. Interview conducted as part of household survey on social implications of owner-occupation, April 1986 . Surprisingly 1981 Small Area Census data for Slough does not 2. indicate that immigrants are being ghettoised, though there are no figures for unemployment and figures are only available for the (usually) male heads of household . Thus whereas 22 .5% of all heads of household were in semi-skilled or unskilled manual work, only 21 .2% of immigrant heads were . And at the other extreme, while 10 .5% of all household heads were employers and managers, the figure rises to 12 .1% in the immigrant community . This 10% data is not, of course, entirely reliable (and also includes the considerable number of East European immigrants living in Slough) but it is perhaps testimony to the point made above that occupational status is less important than the type of company worked for . Thus unskilled or semi-skilled workers who work for Mars may well be doing better than `skilled' workers in jobbing shops . This entire issue needs further research which we will be undertaking in the future . 3. Interview with Pat Farrelley, of Lansing-Bagnall, Basingstoke . See Crompton & Jones (1984) for a general discussion of the issue 4. of women's prospects in the internal labour markets of public and private employers . 5. See RCB (nd). For the general need to relate housing provision to patriarchal relations see Banim & Stubbs (1986) . 6. We are indebted to Keith Jerromme for comments on these points .

Notes



Capital & Class 180

7. The University of Sussex survey of households in Slough . It should be emphasised that these are first impressions and the data has not been analysed yet. 8. The Ministry of Agriculture, Forestry and Fisheries has also been a target and is under pressure to re-evaluate the system whereby development of particular types of farmland is subject to an automatic veto . 9 . Standing Conference on London and South East Regional Planning . 10 . Interview with Deputy Director, East Berks and South Bucks Chamber of Commerce . 11 . Hamnett (1984) argues that Thorns is wrong to focus on the regional dimension of these processes (rather than the urban/suburban and exurban), but does not question his general arguments . 12 . It has also been stated that considerable numbers of people who have purchased their council houses are running into problems in making mortgage repayments (informal discussions with estate agents in the area) . The work of Mark Bhatti (1985) on owner occupation in Reading is of considerable importance here .

References

Ambrose, P . (1986) Whatever Happened to Planning? London : Methuen (forthcoming) . Ambrose, P . & Barlow, J . (1986) `Housing provision and housebuilding in Western Europe . Increasing expenditure, decreasing output?' University of Sussex Working Paper in Urban and Regional Studies . Ball, M . (1983) Housing Policy and Economic Power . The Political Economy of Owner Occupation . London : Methuen . Banim, M . & Stubbs, C . (1986) `Rethinking the terms of tenure : a feminist critique of Michael Ball', Capital & Class 29 . Barlow, J . (1986) `The restructuring of housing provision : some implications for local political alliances' . University of Sussex Working Paper in Urban and Regional Studies No . 54 . Barlow, J . (1987) `The housing crisis and its local dimensions' . Housing Studies (forthcoming) . Bhatti, M . (1985) The Home versus Ownership : Tensions and Conflicts in Working Class Owner Occupation . Unpublished paper, University of Sussex, School of Cultural and Community Studies . Bramley, G . (1984) `Mr Jenkin's Cudgel' . Roof(July/August) 22-24 . Champion, A . & Green, A . (1985) `In search of Britain's booming towns : an index of local economic performance for Britain' . University of Newcastle CURDS Discussion Paper No . 72 . Crompton, R . & Jones, G . (1984) White Collar Proletariat. Deskilling and Gender in Clerical Work . London : Macmillan . Dickens, P ., Duncan, S ., Goodwin, M . & Gray, F . (1985) Housing, States and Localities . London : Methuen . Duncan, S . & Goodwin, M . (1985) `Central government control versus local autonomy : the local government crisis in Britain 1979-84' . London School of Economics Department of Geography Discussion Paper, New Series No . 13 . EBSBCC (1985) Survey of Business Trends in East Berks and South Bucks . East Bucks and South Bucks Chamber of Commerce . Fleming, S . (1984) 'Housebuilders in an area of growth : negotiating the

Politics of growth

built environment of central Berkshire' . University of Reading Geographical Papers No . 84 . Friedmann, A . (1977) Industry and Labour . London and Basingstoke : Macmillan . Forrest, R . & Murie, A . (1984) `Right to buy? Issues of need, equity and polarisation in the sale of council houses' . University of Bristol School of Advanced Urban Studies Working Paper No . 39 . Green, A . (1985) `Recent trends in the service sector in Tyne and Wear and Berkshire' . University of Newcastle, CURDS Discussion Paper 71 . Hamnett, C . (1984) `The post-war restructuring of the British housing and labour markets : a critical comment on Thorns' . Environment and Planning A 16,147-62 . Howells, C . (1983) `The politics of local authority finance' . Critical Social Policy 2(2), 73-79 . Husbands, C . (1983) Racial Exclusionism and the City : the urban support of the National Front . London: Allen and Unwin . Jessop, B . (1982) The Capitalist State . London : Martin Robertson . Johnson, R . (1985) The Geography of English Politics . London : Croom Helm . McAllister, I . & Rose, R . (1984) The Nationwide Competition for Votes . London : Pinter . Massey, D . (1984) Spatial Divisions of Labour . London : Methuen. Merrett, S . (1979) State Housing in Britain . London : RKP . Morgan, K . & Sayer, A . (forthcoming) Microcircuits of Capital: `sunrise industry and uneven development' . Polity Press . Pahl, R . (1984) Divisions of Labour . Oxford : Blackwell . PEP (1938) Report on the Location of Industry . London : Political and Economic Planning . RCB (1983) Central Berkshire . Land for the Additional 8,000 Houses : Strategic Guidelines . Royal County of Berkshire Planning Department . RCB (1985a) Review of Berkshire's Structure Plans . Stage 2 Consultation . Royal County of Berkshire Planning Department . RCB (1985b) Planning Commitments for Housing at March 1985 . Royal County of Berkshire Planning Department . RCB (1985c) Development Trends in Berkshire, 1984 . Royal County of Berkshire Planning Department . RCB (1985d) Report of the 1984 Survey of Employers . Royal County of Berkshire Planning Department . RCB (1986) Review of Berkshire's Structure Plans . Stage 2 Consultation . Royal County of Berkshire Planning Department. RCB (forthcoming) Survey of New Households: summary report. Royal County of Berkshire Planning Department . RCB (nd) Berkshire County Council's Comments on DoE Household Projections (unpublished) . Savage, M ., Barlow, J ., Duncan, S . & Saunders, P . (1986) `Doing locality research : the Sussex Programme on "Economic Restructuring, Social Change and the Locality" ' . Quarterly journal of Social Research (forthcoming) . Saxenian, A . (1985) `Silicon Valley and Route 128 : regional prototypes or historic exceptions' . In Castells, M . (ed .), High Technology, Space and Society . Beverley Hills : Sage .

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Smyth, H . (1985) `Land supply, housebuilders and government policies' . University of Bristol School of Advanced Urban Studies Working Paper No . 43 . Thorns, D . (1982) `Industrial restructuring and change in the labour and property markets in Britain' . Environment and Planning A 14, 745-763 . TUC (1938) file D26 in TUC Archive, London, concerning trade union organistion in Slough . Turok, I . (forthcoming) PhD thesis on employers in Bracknell . University of Reading . Urry, J . (1981) `Localities, Regions and Social Class' . InternationalJournal of Urban and Regional Research 5(4), 455-474 . Witt, S . & Fleming, S . (1984) `Planning councillors in an area of growth : little power but all the blame?' University of Reading Geographical Papers No . 85 .

COMPETITION AND MONOPOLY

the recent wave of conglomerate mergers, there has been renewed interest in theories of competition and monopoly . In particular, debate has focused on the form and nature of competition within contemporary capitalism . Are competitive forces intensifying or diminishing within the British economy? Has rising market concentration led to economic stagnation, as some writers contend? Or is it helping to promote a more dynamic industrial base by facilitating the restructuring of production? How are the forces of competition experienced by large, multinational enterprises? These questions form the backdrop to the three papers by Wheelock, Burkett, and Bryan and the review article by Kay presented in this issue . A common theme running through the articles is a concern to operationalise Marx's theory of competition . This is seen as a necessary first step towards an understanding of monopoly . The contributions by Wheelock and Burkett are responses to Bryan's `Monopoly in Marxist Method', Capital & Class 26 . Bryan argued that monopoly should be comprehended as a form of competition which needs to be located in terms of Marx's theory of value . Elaborating this argument, Bryan distinguished `competition in general' and `concrete competition' . Wheelock agrees that it is important to specify different levels of analysis, but argues that it is also crucial to periodise capitalism . Burkett's paper also addresses this theme . Arguing that competition is generated and constrained by the character of capitalist social relations, he goes on to illustrate that forms of competition and monopoly reflect the underlying exploitative nature of production . In the third paper, Bryan responds to these contributions . The section concludes with a review article by Geoffrey Kay of Macroeconomics and Monopoly Capitalism by Ben Fine and Andy Murfin . COINCIDING WITH

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JANE WHEELOCK

Competition and monopoly : A contribution to debate

recent article on `Monopoly in Marxist Method' (Capital & Class 26) was an interesting one in many respects, and it was particularly useful that he should be so careful to relate the Marxist analysis of competition to that of class relations . It was also helpful to have the problems implicit in theories of monopoly capitalism highlighted in terms of the conceptualisation- of monopoly and of the institutionalist interpretations this can give rise to . I would, however, like to raise a couple of points which it seems to me that Richard Bryan's article fails to develop, and which I did not have the space to spell out in my own article of two years ago (Capital & Class 21) . Firstly, I think it is useful to make some methodological points about the level of analysis at which an examination of competition can be undertaken and this provides a link between the two articles . Secondly, I should like to discuss the relevance and importance of periodising capitalism for a study of competition . Much of Bryan's article seems to imply that periodisation is not a significant issue, though he is quite right to point out the problems which arise from the terminology used in periodisation schemes . It is obviously important for any Marxist analysis to include class relations . The difficulty is to get beyond the point where class permeates by definition the relations of competition between capitals, when as Bryan so nicely puts it, class is `only a passive theoretical presence' (Bryan, 1985 : 74) . What is noticeable is that RICHARD BRYAN'S

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Bryan himself doesn't get beyond this point either, and this I think is a function of the level at which his investigation of competition takes place . Uno (1980) proposes a method of distinguishing levels of investigation which is helpful here . Kozo Uno identifies three levels of investigation in his `Principles of Political Economy' . The study of political economy can, he argues, be structured as follows : firstly, there is the pure theory of capitalism which presupposes an abstract context and deals with basic concepts ; secondly, the process of capitalist development in which the economic phenomena representing the abstract principles of capital appear in concrete and stagecharacteristic forms, while the third and ultimate aim is an analysis of the actual state of capitalism . My own article on competition and monopoly was at the second level, whilst it seems to me that Richard Bryan's tends to be at the first . Let me expand a little on what this implies . In his critique of political economy Marx was concerned with the theory of capitalism as a specific mode of production, and put forward what he saw as the laws of such a mode . This is at the level of Uno's `pure theory of capitalism' . There is then the mode of realisation of those laws, and it is at this level that the transformation from `free competition' to `monopoly as a form of competition' (to use the terminology I developed in my article) is located .' It seems to me that this historical transformation needs discussion in the context of periodising capitalism, of which more below . What would probably be accepted by most Capital & Class readers is that twentieth-century capitalism is still characterised by the prevalence of the capital relation, entailing a specific mechanism for exploitation, a point which I therefore do not wish to argue further . Competition, however, is the mechanism which sets the internal laws of capital into motion . My article was concerned to examine the effect that historical changes in the nature of competition have had on those laws . I was examining the way in which the economic phenomena representing the abstract principles of capital (the law of surplus value) and the relations between many capitals appear in stage characteristic form through the operation of competition and monopoly . In contrast, Bryan doesn't see it as particularly important to periodise capitalism . Turning now to the distinction between Uno's first and third level of analysis, this concerns, the distinction between the capitalist mode of production and a particular social formation . Whilst the former concept is an abstraction, the latter is more concrete . The capitalist mode of production concerns the theory of the relations between two classes (bourgeoisie and proletariat), but a social formation may contain additional classes, and unfolds

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over a scale of chronological time . The study of a social formation is at Uno's third level of investigation, and neither Bryan nor myself have been concerned with it . It is, however, interesting to note that Marx does in fact see competition acting at this third level of analysis when he deals briefly in Volume III with the specifics of the movement of market prices (see Marx, 1909 : Ch . 10) . This level of operation of competition has, I would argue, been the predominant level at which orthodox analyses of competition and monopoly have been carried out . Marx in fact spends substantially more time presenting competition at a general level, as a realisation of the abstract laws of `capital in general' than at the level of the relation between `many capitals' . It is also Bryan's concern when he wishes to construct the categories of competition and monopoly from more basic categories of Marxist theory . My own concern was not merely to examine competition ('in general' to use Bryan's terminology), in relation to `capital in general', but to look at competition and monopoly as changing processes taking stage characteristic forms . Neither Bryan nor myself deal with Uno's third level of analysis, for which empirical material would be of more relevance . Yet despite the very abstract level at which Bryan is conducting his examination of monopoly, he does not really consider the overall context within which competition takes place . Although competition within the capitalist class is the focus of attention (in Marx's terms, the relationship between `many capitals'), the capitalist class can also be divided into fractions : banking, industrial and commercial capital . In the twentieth century it has further often been separated into types : monopoly and non-monopoly . It seems to me important to acknowledge these `institutional' divisions, for competition among capitalists both affects and is affected by the institutional forms taken by accumulation (whether non-monopoly, monopoly, finance or international capital) . The credit system provides a link here . I would thus concur with Bryan that accumulation and competition cannot readily be separated, but feel that the institutional forms taken by each need developing and analysing . It is particularly noticeable that finance capital is not even mentioned by Bryan . State policies, class struggle and crisis are also linked to competition within the capitalist class, but are unfortunately each huge areas for study and controversy in themselves . It is for this reason that it is not easy to get at how class relations are important to competition ; after all, the study of the changing form of the wage relation as a mode of regulation of capitalism is in fact a whole area of study arising out of the labour process debate . As Aglietta (1979) and Lipietz (1979) both demonstrate however, capitalist regulation is concerned with Uno's second level of analysis, the

Competition and monopoly

mode of realisation of the laws of capitalism, so that again it is not surprising that Bryan does not get beyond general laws . What becomes apparent from examining the levels of analysis at which a consideration of competition and monopoly might be undertaken is that periodising capitalism is crucial . This is perhaps where Bryan's and my own article differ most, for on the one hand my article takes the periodisation of capitalism into phases as given, but develops and specifies a classification of phases on the basis of the changing forms of competition and monopoly . In contrast Bryan is concerned to construct categories of competition and monopoly without reference to any periodisation schema . What is at issue it seems to me in developing a schema for periodisation is the need to forge links between the abstract and the concrete levels of analysis . It is interesting to note that competition is of course itself a concept bridging abstract laws and their realisation in the world . Competition is in fact the mechanism which sets the internal laws of `capital in general' into motion in the form of `many capitals', thus providing a link between levels of abstraction . It therefore becomes crucial to distinguish between stages within a mode and new modes of production . For most Marxists a new mode is characterised by basic changes in the relations of production, including any change in the possession or control of the means of production . A change in the form of social relations on the other hand indicates a distinct stage . Different authors see different aspects of the social relations of capitalism as significant, often depending on the purpose the author has in mind . Thus Braverman (1974) is concerned with the changing forms of the working class, Mandel (1975) with the articulation between capitalist, semi-capitalist and pre-capitalist relations of production and Wright (1978) with the accumulation process . Fine and Harris provide the most extensive cover of changes in the form of social relations . Capitalism for them increasingly socialises production and `it is the reflection of this in the development of social relations that we will use to periodise capitalism' (Fine and Harris, 1979 : 109) . In particular, such a periodisation will come about through changes in the methods of appropriating surplus value (as profit or as interest with the development of the credit mechanism, and as tax with the growth of the state) and controlling it (through new forms of control of the production process) . Also of importance are the forms taken by accumulation, by class struggle and by capitalist crisis as well as the forms taken by political relations and in particular the state . As was suggested in my first article, changing forms of competition are linked with changes in the form of value through the capitalist regulatory process .

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There are many terms in use in both the Marxist and the institutionalist traditions that would seem to indicate a widespread feeling that capitalism has changed its nature since Marx was writing : capitalism is qualified as Advanced, Late, PostIndustrial, Mixed, Public Enterprise, State Monopoly or Imperialist Capitalism . There is a strong theme in the Marxist tradition that `monopoly capitalism' (to use the commonest of the terms) is something quite different from competitive capitalism . That this is the case is however frequently seen as a matter for dogmatic assertion, rather than as a proposition that might need arguing for . (See for example Fitch and Oppenheimer, 1970 : Pt I, 73 ; or Baran and Sweezy, 1966 : 17 .) That there may be some continuity between competitive and monopoly relations is ignored, and that monopoly capitalism may involve other features beside market relations is not entered into . In my earlier article I indicated that even Lenin implies a lack of continuity between competitive and monopoly capitalism . There is also a strong current in the contemporary literature which sees Marx's model of capitalism as historically specific . The alternative view of the change from competitive to monopoly capitalism is that its crucial characteristic is one of continuity . In the process of capitalist development the economic phenomena representing the abstract principles of capital appear in concrete and stage characteristic forms . The transformation from free competition to monopoly is located at the level of the realisation of the laws of capitalism . It is thus important to demonstrate what kind of capitalism we now have, and to assess the changes in the form of social relations that have taken place . Since the purpose here is to examine the changing nature of competition and analyse how it alters as capitalism develops, the focus for periodising capitalism could therefore appropriately be the changing forms taken by accumulation . As I suggested earlier, the institutional form for this was initially competitive (or nonmonopoly capital), then monopoly capital, finance capital and perhaps with the addition of `state capital' . This could also be seen in terms of the increasing socialisation of production which is for Fine and Harris the hallmark of capitalism's development process . The increasing socialisation of production is clearly reflected in the shift to large-scale enterprise, finance capital and the increasing role of the state . Socialisation of production, however, is also reflected not only in the institutional form adopted by capital but also in changing forms of the working class, as Braverman points out . The changing forms of social relations in fact all parallel each other . Thus changing forms of accumulation give rise to changing methods both of appropriating and of controlling

Competition and monopoly

surplus value . With the development of the credit system, profit of enterprise is increasingly transposed into interest, and finally takes the form of taxation by the state . Control correspondingly shifts from process control (control of particular production units) to the accounting form (control at the level of the firm) and then to financial control (control of particular capitals through the agency of money capital) . 2 Such structural transformations are of course bound to be mediated by class struggle, and thus lead to changes in its form as well . Correspondingly there will be changes in the forms of crisis and of the state . Such changes will frequently lead to institutional reorderings, and it seems to me that an examination of institutional changes is inherent in any consideration of competition which goes beyond general laws associated with capitalism as a mode of production . Of course it is not sufficient merely to look at institutional change, but perhaps Bryan tries to throw out the baby with the bathwater in his criticisms of institutionalist approaches . The major task in studying competition is surely to show just how the realisation of Marx's laws has changed ; and in particular the forms of competition, the process of capitalist regulation and the forms of surplus value . Thus in my article I suggested that for the purpose of analysing the changing nature of competition, capitalism can be divided into three stages : a transitional stage in which merchant capital predominates, followed by the competitive stage analysed by Marx . At the monopoly stage industrial capital is supplemented by finance capital and monopoly capital is the typical form taken by `many capitals' . (Whilst I would agree with Bryan that `monopoly capital' is a misleading term because of its association with the neoclassical concept of monopoly, it is so widely used amongst Marxists that I would be hesitant to use `corporate capital' or `big business' as alternatives .) Contrary to Marx's expectations, capitalism has survived . Why has it? An important contribution has probably been made by the ideological strength of capitalism, but the growth of oligopolies and large-scale enterprise provided a means for the capitalist mode of production to adapt to its contradictions . Such a view stems from the distinction made between the internal laws of capitalism and their mode of realisation . The blind regulatory mechanism of free competition was no longer sufficient to resolve the contradictions of accumulation and the tendency of the profit rate to fall, and the concentration and centralisation of capital (phenomena which of course Marx himself pointed to) allowed the accumulation process to continue . As Kosonen says : 'Monopolies must be considered a means for the capitalist mode of production to adapt to its own contradictions' (Kosonen, 1977 :

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379) . The developments of twentieth-century capitalism, then, require a fresh examination of Marx's political and economic prognostications albeit within the framework of the laws he adumbrated . Monopoly in the broad sense (amongst other things) has provided a survival mechanism for capitalism, and in my article I examined the forms that competition takes today, arguing that monopoly is itself but another form of competition . Could I conclude by saying that it seems to me that there is an urgent need for more Marxist empirical work on competition, at the level of the study of the social formation . There are indeed several fields of inquiry where Marxist theories of competition have already been used to good effect . Those that spring to mind are the work that has been done by people like Thompson (1977), Overbeek (1080), Coakley and Harris (1983) and Minns (1980) on financial groups and the links between finance capital ; the work on Marxist managerialism and the behaviour of large-scale enterprises by, for example, Fenema (1979) and by Scott (1979, 1984, 1985), and the work on international implications where Andreff (1984) is an example . I understand that Richard Bryan has himself undertaken empirical work : it would be most valuable to see the links he makes between this and the theoretical analysis incorporated in his recent article . Notes

1. See Wheelock, pp . 35-37 . `Free competition' is competition between non-monopoly capitals, between units of capital which have no barriers between them . `Monopoly as a form of competition' is competition betwen different monopoly capitals whether within or between sectors . This latter form of competition incorporates the characteristics that monopolies anyway possess : agreements between firms in the same industry can be replaced or supplemented by agreements between firms in different industries, and in particular diversification can lead to competition between sectors . 2. The terms are those of Fine and Harris (1979) . See pp . 116-117 .

References

Aglietta, M . (1979) A Theory of Capitalist Regulation . The us experience . London : New Left Books . Andreff, W . (1984) `The International Centralisation of Capital and the Reordering of World Capitalism' . Capital & Class 22 . Baran, P .A . & Sweezy, P .M . (1966) Monopoly Capital: An essay on the American economic and social order. Harmondsworth : Penguin . Braverman, H . (1974) Labour and Monopoly Capital. The degradation of work in the twentieth century . New York : Monthly Review Press . Bryan, R . (1985) `Monopoly in Marxist Method' . Capital & Class 26 . Coakley, J . & Harris, L . (1983) The City of Capital. Basil Blackwell . Fenema, M . & Schijf, H . (1979) `Analysing Interlocking Directorates : Theory and Methods' . Social Networks, 1 . Fine, B . & Harris, L . (1979) Re-reading Capital. London : Macmillan . Fitch, R . & Oppenheimer, M . (1979) `Who Rules the Corporations?' Socialist Revolution Vol . 4 .

Competition and monopoly

Kosonen, P. (1977) `Contemporary Capitalism and the Critique of Political Economy . Methodological Aspects' . Acta Sociologica, Vol . 20, No . 4 . Lipietz, A . (1979) Crise etlnflation, Pourquoi? Paris : Maspero . Lenin, V .I . (1970) Selected Works, Vol . I . Moscow : Progress Publishers . Mandel, E . (1975) Late Capitalism . London : New Left Books . Marx, K . (1909) Capital, Vol . III . Chicago: Charles H . Kerr . Minns, R . (1980) Pension Funds and British Capitalism . The ownership and control of shareholdings . London : Heinemann . Overbeek, H . (1980) `Finance Capital and the Crisis in Britain' . Capital & Class 11 . Scott, J . (1979) Corporations, Classes and Capitalism . London: Hutchinson University Library . Scott, J . & Griff, C . (1984) Directors of Industry . The British Corporate Network 1904-1976 . Cambridge : Polity Press . Stokman, F.N ., Ziegler, R . & Scott, J . (1985) Networks of Corporate Power . A Comparative Analysis of Ten Countries. Cambridge : Polity Press . Thompson, G . (1977) `The Relationship Between the Financial and Industrial Sector in the UK Economy' . Economy and Society . Uno, K . (1980) Principles of Political Economy . Brighton : Harvester . Wheelock, J . (1983) `Competition in the Marxist Tradition' . Capital & Class 21 . Wright, E .O . (1978) Class, Crisis and the State . London : New Left Books .

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PAUL BURKETT

A note on competition under capitalism

The author thanks Fiona Atkins and Michael Cowen for helpful comments, and Debbie Zamparello for typing this paper . to any member of capitalist society that competition permeates and is the driving force of this society . Firms compete for profits, workers compete for jobs, and cities, regions and nations compete for firms' investments . Yet bourgeois economic theory provides little if any insight as to what competition is, and how competition is generated by the social relations which define capitalism as a historically specific - hence transitory - society . Bourgeois theory is of little use in determining what capitalist competition is, because it views competition merely as the interaction of individual agents (firms and households) in the market . In this view, competition involves the maximisation of agents' objective functions to the constraints of a) other agents' actions in the market, and b) the `resource endowments' which individual agents possess . This is not only an ahistorical concept of competition (in that the historically specific nature of agents, their objective functions, and resource endowments is not analysed), but also leads inevitably to the characterisation of competition in terms of the number of agents competing : the greater the number of agents, the more `perfect' competition is . Thus, rather than pinpointing the historical specificity of capitalist competition, bourgeois economic theory conceptualises competition in a purely IT IS OBVIOUS

Competition and monopoly negative way : as the absence of ability of individual agents to effect market outcomes (Weeks, 1981 ; McNulty, 1968, 1984) . 1 From the `invisible hand' in Adam Smith to the `Pareto Optimality' of perfect competition in neoclassical theory, this negative definition of competition has been used to support the bourgeois claim that capitalist society is characterised by a harmony of interests among competing economic agents . In contrast, Marxist theory must emphasise the historically specific nature of capitalist competition by showing how competition is generated and limited by the social relations (in particular, the relations of production) which are specific to capitalism . In this respect, Bryan (1985) has recently made a most valuable contribution to the Marxist theory of competition . Bryan defines competition as the process by which value moves through the forms of money, commodities, and productive capital in the circuits of capital . This allows Bryan to 1) clearly distinguish competition in production from competition in the market, and 2) formulate a straightforward definition of monopoly as the reproduction of non-equivalence in the movement of value between different forms . Bryan's analysis provides a basis for systematically developing the relations between 1) capital-labour competition over the rate of surplus value production, 2) the competition among capitals (both within industries and in the movement of capital among indistries), and 3) the competition among workers and the material conditions for progressive working-class movements which are generated by 1) and 2) . Accordingly, the purpose of this note is to make a small contribution towards a Marxist analysis of these relations . This is attempted not th ough a critique of Bryan's analysis, but rather through a rigoroi s application of Bryan's definition of competition . The questi( ns which shape the present analysis are as follows : First, what c etermines the historical specificity of capitalist competition?, rind second, how do capitalist relations shape and constrain the forms of competition (particularly in the sphere of commodity and money exchange) which existed prior to capitalism? Capital may be defined as value in process, or self-expanding Capital and value (Marx, 1967, Vol .1, Chapter 4 ; Vol . II, Chapters 1-4 ; 1978 : competition 2 140) . Capital existed prior to capitalism, in the form of interest bearing capital (M-M', advancement of money to obtain more money) and in the form of merchant capital (M-C-M', buying commodities cheap and selling them dear) . But in these forms, the expansion of exchange value did not occur through the penetration of capital into production, but instead through the appropriation of a previously produced surplus in exchange . What makes capitalism a historically specific society is the

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penetration of capital into production via the buying and selling of labour power . In labour power, capital finds a commodity with the ability to create surplus value, or value in excess of that required for its own reproduction . By taking hold of production in this way, capital obtains the most adequate basis for its own reproduction, i .e . for the self-expansion of value . The historical specificity of the capitalist mode of production - and of societies dominated by this mode - is expressed in the circuit of industrial capital : M-CMP . . .P . . .C'-M' in which money is advanced to obtain means of production (MP) and labour power (LP) which are then combined in a production process (P) from which emerges a commodity output (C') containing a surplus value which is realised via sale of the output for money (M') . Three traits of this circuit are notable . First, it is through the reproduction and expansion of the circuits of industrial capital that the basic class relations of capitalism are reproduced and expanded : the capitalist class owning the means of production and the working class owning only labour power which it must sell to the capitalists in exchange for a wage - a wage used to purchase commodities alienated from workers in production (Marx, 1967, Vol . 1, pp . 570-78 ; Vol . II, p . 32) . Second, in the circuit of industrial capital, capital (or value in process) must repeatedly take on and discard the forms of money capital advanced, commodities (means of production and labour power), productive capital (combination of means of production and labour power in production), commodities produced, and money (value and surplus value realised via sale of commodities) . Third, in the capitalist mode of production all products are necessarily commodities, because : a) it is only through the purchase of labour power and means of production, and their combination in commodity production that surplus value can be extracted from the working class by the capitalist class, and b) it is only through the sale of commodities that the surplus value extracted from workers can be realised in money form and hence re-advanced, or accumulated for further production of surplus value . Just as capital can be defined, most generally, as value in movement (or self-expanding value), competition can be defined most generally as the process by which value moves from one form to another form (Bryan, 1985) . Competition existed prior to the capitalist mode of production, in the determination of the prices at which commodities were bought and sold by merchant capital (movement of capital between money and commodity

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forms), and in the determination of the rate of interest on loans (movement of capital between money and augmented money forms) . These forms of competition pre-date, and are not specific to, the capitalist mode of production . This is reflected in the fact that competition over commodity prices and the rate of interest occurs in the realm of exchange - as opposed to the production of value and surplus value . The historical specificity of capitalist competition can only be determined by focusing on the defining traits of capitalism . Marx (1973, p . 449) refers to this level of theoretical abstraction as `capital in general . . . an abstraction which grasps the specific characteristics which distinguish capital from all other forms of wealth - or modes in which (social) production develops .' Analysis on the level of capital in general seeks to show how competition is generated by the basic class relations of capitalism (Rosdolsky, 1977) . In the circuit of industrial capital, it is the competition between capital and labour that determines the rate at which surplus value is produced . This occurs in the struggle over wages and the value of labour power, which as Marx (1976b, p . 58) puts it, `resolves itself into a question of the respective powers of the combatants' . It also occurs in the conflict between workers and capitalists over the organisation of production and over the determination of the working day and the productivity and intensity of labour . In other words, the foci of competition between workers and capitalists are - on the level of capital in general - the movements of capital between its money, commodity and productive forms, specifically : 1) the movement from money capital advanced to labour power (the focus of the wage struggle), 2) the movement from commodity capital (means of production and labour power) to productive capital (the focus of the struggle over how production will be organised), and 3) the movement from productive capital to commodity capital (the focus of the struggle over the duration, productivity and intensity of labour) . It is important to note that on the level of capital in general, competition does not occur in markets for commodities other than labour power . This is simply because competition over the prices of such commodities is not specific to the capitalist mode of production . Similarly, competition between borrowers and lenders of money capital is abstracted from because this form of competition predates the penetration of capital into production via the buying and selling of free labour power. For these reasons, Marx (1967, Vol . I), when conducting analysis on the level of capital in general, simply assumes that means of production and produced commodities are sold at their value, abstracting from unequal exchanges that may result from competition over the

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terms of exchange of money capital for means of production or of commodity outputs for money . In addition, the distribution of surplus value to lenders (as interest) is abstracted from in order to focus on competition which is specific to the capitalist mode of production . The goal of capitalist production is to maximise the surplus value extracted from workers, i .e . `the expansion of the mass of capital value' (Shaikh, 1979 : 1) . The three foci of capital-labour competition can be discussed in terms of the methods which capital uses to maximise the rate of surplus value (the ratio of surplus value to value advanced for purchases of labour power) . Historically, the first method capital uses is that of lengthening the working day . This centres on the movement of capital from productive capital to commodity capital . The working day can be lengthened either by each labourer working longer hours or by the employment of women and children (i .e . employment of family units), both of which tend to increase competition among workers for employment . But the lengthening of the working day is limited as a method of increasing the rate of surplus value, because it must eventually conflict with the physical reproduction of the working class . Capital accumulation causes increased demand for labour power, everything else equal . Thus, beyond a certain point, further increases in the length of the working day cause a decreased intensity of labour and a decreased supply of labour power, due to the degenerative impacts of increased labour time on the working class . Further, the working class can be expected to struggle against increases of the working day, if for no other reason than its self-preservation . The state is thus forced to regulate the length of the working day in order to control working-class unrest and to ensure the reproduction of sufficient supplies of labour power for continued capital accumulation (Marx, 1967, Vol . I, Pt 3) . 3 The second method used by capital to increase the rate of surplus value is to reorganise production . This centres on the movement of capital from commodity capital (labour power and means of production) to productive capital . Capital seeks to reorganise production so as to increase the productivity and intensity of labour (i .e . to maximise the movement from productive capital to commodity capital) and to decrease the dependence of production on the labour of skilled-hence higher paid - workers (increasing the movement from money capital to labour power) . This reorganisation occurs through the deskilling of production (subdivision of tasks into simple components) as a basis for the mechanisation of production which increases the productivity and intensity of workers' labour (Marx, 1967, Vol . I, Pt 4 ; Shaikh, 1978 ; Braverman, 1974) . Deskilling and mech-

Competition and monopoly anisation of production also entail increased numbers of supervisory workers and a hierarchical reorganisation of the division of labour within firms as capital increasingly separates the conception of the labour process from its execution (Braverman,1974) . ° The struggle between capital and labour over how production will be organised not only determines the extent to which labour processes are shaped by the profit imperatives of capital, but also has crucial implications for the wage struggle . In the aggregate, increases in the productivity of labour result in a decreased value of workers' consumer goods, hence in a tendency toward decreases in the value of labour power . This makes it possible for real wages (measured in terms of use values) to increase simultaneous with increases in the rate of surplus value . However, since these productivity increases are obtained primarily through deskilling and mechanisation - involving increased expenditures on fixed capital and unproductive supervisory workers - capital must ceaselessly strive to cut wages in order to maintain the rate of profit, despite increases in the rate of surplus value . Of course, at a lower level of abstraction capital's tendency toward deskilling, mechanisation, and wage cuts is enforced by the competition among capitals, which forces individual firms to cut production costs . (See the next section .) Nevertheless, this tendency is properly derived on a higher level of abstraction (of capital in general), because it is the antagonistic, competitive relationship between capital and labour at the point of production that conditions the forms taken by competitive cost-cutting by capitalist firms (Shaikh, 1978 ; Braverman, 1974) . In addition, a notable feature of the reorganisation of production by capital is that its success in increasing the rate of surplus value depends on its ability to increase competition among workers . The deskilling of production increases the interchangeability of workers, forcing workers to compete with each other more directly in the labour power market . This puts downward pressure on wages (Marx, 1976a : 44-45) . If workers successfully struggle for higher wages, and if this begins to threaten the profitability of capitalist investment, then mechanisation of production reproduces a reserve army of unemployed which also puts downward pressure on wages (Marx, 1976a : 45-47 ; 1967 : Vol . I, Chapter 25) . The hierarchical reorganisation of production reproduces a scarce number of higher-paid positions for workers to compete with each other for . The reproduction of the reserve army and hierarchical organisation of production also force workers to compete with each other with respect to the intensity of their labour . More generally, the commodification of need satisfaction (based on the fact that under capitalism products are necessarily commodities) reproduces scarcity and competitive

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behaviour among workers by redefining need satisfaction as individual consumption of goods and services rather than collective consumption and humanistic relations with peers (Lebowitz, 1977-78) . At the same time, the reorganisation of production by capital produces tendencies towards more cooperative, class interested behaviour among workers . The mechanisation of production occurs through concentration and centralisation of capital into larger-scale units, hence through agglomerations of larger numbers of workers . The potential for unionisation of workers and disruption of production by workers is increased by this development . Further, the hierarchical organisation of the labour process creates a need for new strata of labourers of greater technical/ intellectual expertise . This, combined with the alienation of workers' creative, communicative powers in undemocratically structured workplaces and commodified consumption, produces a `surplus consciousness' 5 among workers which is a potential fuel for collective actions by the working class whose goal is a more democratic structure of production and consumption (O'Connor, 1984) . Capital accumulation itself produces a potential basis for these actions in the increasingly complex and broad social division of labour . This increases the interdependence of workers as producers and consumers on national and global scales, thus widening the sphere of workers' common interests in decreasing the rate of surplus value and in general democratically restructuring production and consumption . More generally, the fact that workers have nothing to sell but their labour power gives them less of a stake in the capitalist system than the capitalist class has . As a class - if not as individuals in competitive labour power markets - workers do indeed `have nothing to lose but their chains' if they undertake collective class actions . 6 Capital responds to such working-class movements with further reorganisation of production . This includes not only additional deskilling and mechanisation, but also the withholding and/or relocation of investments in means of production in response to declining surplus value production . Through the spatial and technical restructuring of productive capital, capital attempts to increase competition among workers within and among regions and nations . In short, at the level of capital in general competition among workers is a form of the competition between the working class and the capitalist class . Capital-labour competition focuses on the rate at which capital moves between its money, commodity, and productive forms . Capital succeeds in increasing the rate of surplus value to the extent that it succeeds in increasing competition among workers, either by increasing the length of the working

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day or by reorganising production . What distinguishes capitalist competition from earlier forms of competition is the penetration of production by competitive forces through the competition between capital and labour over the rate of surplus value production . This reflects the fact that the capitalist mode of production involves the penetration of capital into production via the buying and selling of labour power . Capitalist competition is thus specific to the wage labour-capital relation . As previously noted, capitalist production is necessarily commodity production because it is based on the commodity status of labour power and the private ownership of the means of production by the capitalist class . Thus, capitalism is by definition a system in which private firms (or, as Marx calls them, `individual capitals') compete with one another to determine which firms will get the larger shares of the value and surplus value extracted from workers . At a lower level of abstraction Marxist theory analyses how this competition among capitals is based on, and limited by, the capital-labour competition which was established on the level of capital in general . This includes determining how the forms of competition which existed prior to capitalism are subordinated to the competition between capital and labour over value and surplus value production . Inter-industry competition Competition among capitals occurs in the movement of money capital among industries in response to profit differentials . As capital moves in search of higher profits, a system of prices of production is established . For a single industry, the price of production is equal to the cost price of a unit of output' plus the unit profit which yields the average rate of profit on capital advanced in all industries . Capital is attracted to industries with profit rates greater than the average rate of profit (i .e . with prices greater than prices of production), which increases the supply of commodities produced in these industries . Hence, capital movements tend to remove above average rates of profit . The opposite occurs in industries with below average rates of profit . In this way, prices of production and the average rate of profit tendentially regulate market prices and industry rates of profit (Marx, 1967 : Vol . III ; Levine, 1980 ; Semmler, 1984 ; Shaikh, 1979) . This process differs from the notion of `general equilibrium' in neoclassical theory, in that the sum of the prices of production is regulated by the sum of values, and total profit is regulated by total surplus value (Marx, 1967, Vol . III : 179-80) . Thus, the

Competition among capitals

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formation of the average rate of profit (and prices of production which generally deviate from values) is constrained by value and surplus value production in the circuits of industrial capital . Since prices of production are the centres of gravity for market prices, the real explanation of long-run trends in market prices (as opposed to short-term fluctuations due to differences between supply and demand) resides in changes in the values of commodities . Indeed, it is precisely because prices of production only tendentially regulate market prices, through `a turbulent and fluctuating process, with constantly varying market prices and market rates of profit' that it becomes necessary to penetrate these surface appearances by using value categories to determine the underlying laws of motion of the capitalist mode of production (Shaikh, 1979 : 8) . As Marx (1967, Vol . III : 189) puts it, `the real inner laws of capitalist production cannot be explained by the interaction of supply and demand . . . because these laws cannot be observed in their pure state, until supply and demand cease to act, i.e . are equated .' Capital movements occur in two basic ways . First, money capital is mobilised and allocated by the banks ." The banks appropriate part of the surplus value produced in the circuits of industrial capital through the interest charged on loans . The price of production for the banking sector is equal to the unit cost price of mobilising and allocating money capital (including the interest rate paid to depositors), plus the unit profit on loans (i .e . the interest rate on loans) which yields the average rate of profit on capital advanced in all industries . The banks allocate money capital on the basis of relative rates of profit in different industries, including the banking sector . In this way, the rate of profit on capital advanced in the banking sector is tendentially regulated by the average rate of profit (Marx, 1967, Vol . III, Pt 5 ; Panico, 1980) . 9 Competition over the rate of interest - a form of competition predating the capitalist mode of production - is thus subordinated to the requirements of surplus value production, as different industries compete for the money capital allocated by the banks, and the profits of the banks depend upon the production of surplus value in the circuits of industrial capital . This analysis differs greatly from neoclassical theory, which equates money capital with physical capital goods, and in which movements of money capital result in an equilibration of the rate of interest with the rate of return to physical capital . This leads to the apologetic view that profit is a cost of production for capitalist firms (Hirshleifer, 1970) . In contrast, the Marxian view is that interest is a share in the surplus value extracted from workers ; and a situation in which the rate of interest equals the average rate of profit (i .e . in which the rate of profit of enterprise is zero) is

Competition and monopoly characteristic, not of `equilibrium', but instead of economic crisis . A zero rate of profit of enterprise would remove all incentive to invest in industrial enterprises, causing surplus value production (and the interest collected by banks) to collapse (Shaikh, 1980) . Second, capital movements occur through advances of money capital towards different industries by individual industrial capitals, or conglomerates (Clifton, 1977, 1983 ; Harvey, 1982, Chapter 5 ; Dugger, 1985) . The concentration and centralisation of capital in industrial firms produces surplus money capital which cannot yield the average rate of profit if re-advanced towards the industry in which it was generated . Further, the high risks of competition within a particular industry (see below) give individual capitals an incentive to diversify their operations . Thus, some individual capitals find it more profitable to expand into additional industries promising above average rates of profit, rather than depositing their idle stocks of money capital in the banks . The movement of capital within conglomerates thus becomes an additional force tending to drive industry profit rates toward the average rate of profit . The operations of conglomerates do not invalidate the above analysis of the mobilisation and allocation of money capital by the banks . To the extent that conglomerates utilise bank loans, they act as an intermediary between individual industries and the banks . Indeed, it can be argued that the allocation of money capital on the basis of deviations from the average rate of profit is facilitated by the financial planning operations within conglomerates . Competition among industries for access to money capital continues, but within the conglomerate network (Harvey, 1982, Chapter 5) . Another way of looking at the movement of capital among industries is in terms of its relation to competition over the appropriation of profits from the purchase and sale of commodities other than labour power - another form of competition which predates the capitalist mode of production . At the lower level of abstraction on which the competition among capitals is analysed, the socially necessary labour time required to produce a commodity is its price of production . Unequal exchange entails the purchase of means of production at a price below price of production, or the sale of commodities at a price above price of production . The social necessity of the prices of production which generally deviate from values - reflects the fact that formation of an average rate of profit (a requirement for maximisation of surplus value production) conflicts with the equality of market prices and values . Thus, this definition of unequal exchange recognises the fact that the modus operandi of the capitalist mode of production is surplus value production (Wolff, Callari &

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Roberts, 1984) . This definition of unequal exchange also avoids a potential contradiction in Bryan's (1985) definition of monopoly as the reproduction of nonequivalence in the movement of value . Since prices of production generally deviate from values, a definition of unequal exchange as price-value deviation would have the nonsensical implication that monopoly is a necessary feature of the regulation of market prices and industry profit rates by prices of production and the average rate of profit . Under capitalism, production over the selling prices of commodities is subordinated to value and surplus value production in three ways . First, if an industry appropriates above average profits through unequal exchange, these profits are made at the expense of individual consumers and other industries . Second, such surplus profits will tend to attract capital into the industry where they are appropriated, causing a movement down toward the average rate of profit . (The opposite will occur if unequal exchange causes a below average rate of profit in an industry .) Third, to the extent that money capital is advanced toward pure trading activity, the rate of profit in the trade industry is tendentially regulated by the average rate of profit . 10 The price of production in the trade industry is equal to the unit cost price of buying and selling commodities, plus the unit profit which yields the average rate of profit on capital advanced in all industries . If the rate of profit in the trade industry is greater than the average rate of profit, capital will be attracted into the industry, causing increased demand for the commodities bought by trading firms and an increased supply of the commodities sold by trading firms . This will tend to eliminate the above average profits in the trade industry . (The opposite will occur if the rate of profit in the trade industry is below average .) 11 In short, at the inter-industry level, competition among capitals occurs through the movement of capital in search of above average profits . This is a competition over which capitalists will appropriate the larger shares of the value and surplus value extracted from the working class by the capitalist class . As such, it is regulated and limited by the competition between capital and labour over value and surplus value production . The relation between the inter-industry competition among capitals and capital-labour competition becomes even clearer if it is noted that one reason for differentials in industry profit rates is the presence of different rates of surplus value in different industries . Further, if we view industries as region-specific, then the movement of capital among industries in search of above average rates of profit is revealed to be a crucial weapon of the capitalist class in its competition with the working class over the overall rate of surplus value production . Capital moves out of industries

Competition and monopoly

and regions where workers are more organised - hence where the rate of surplus value is lower - toward industries and regions in which workers are less organised . In this way, the inter-industry competition among capitals increases competition among workers in different industries and regions, 12 and workers are forced to build inter-industrial and inter-regional labour associations in order to protect themselves against the profit imperatives of capital . Intra-industry competition

Within industries, the relation between capital-labour competition and the competition among capitals is more direct . 13 The competition among capitals within an industry forces individual capitals to adopt the production technique with the lowest unit cost price . If a firm can produce output at a lower cost price than its competitors, it can expand its market share by underpricing these competitors . Conversely, failure to adopt a lower cost technique leads to the loss of part or all of a firm's market share (Marx, 1967a : 43-44 ; Shaikh, 1978) . But due to the antagonistic, competitive nature of the relation between capital and labour at the point of production, the techniques which lower cost price are generally those involving a deskilling and/or mechanisation of production . In other words, unit costs are lowered by increasing the rate at which surplus value is extracted from workers . The intra-industry competition among capitals is thus a competition over which firms can most efficiently exploit their workers . This competitive cost cutting by individual capitals is, obviously, undertaken with the intent of obtaining above average rates of profit . Such surplus profits may be more or less temporary . To see this, assume for simplicity that initially all firms within an industry have the same unit cost price, and that the market price of output (charged by all firms) is equal to the industry's price of production . In other words, all capitals in the industry are making the average rate of profit . Then a firm adopts a new technique enabling this firm to produce output at a lower cost price . This firm can then obtain surplus profits, via : (1) Selling output at a price above its individual price of production but below the industry price of production, thus obtaining surplus profits at the same time that it expands its market share by underpricing competitors . But if the new technique is adopted throughout the industry (by pre-existing competitors or by new capitals attracted to the industry by the surplus profits), these surplus profits will tend to disappear as the lower cost price is generalised . In this case, the above average rate

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of profit is temporary . (2) If the firm adopting the new technique is able to wipe out its competitors by underpricing them in the market, then the surplus profits obtained by selling at a price above individual price of production (which now becomes the industry's price of production) can be less temporary . Further, the firm may be able to appropriate surplus profits by purchasing means of production at a price below their price of production, if the firm's monopoly gives it monopsonistic power (to use the neoclassical term) over the prices of these means of production . The permanence of these surplus profits depends upon maintenance of the firm's monopoly over the lower cost production technique (Marx, 1967, Vol . III, Chapter 10 ; Mandel, 1975) . In either case, the surplus profits are due to the firm's monopoly over a particular technique for transforming commodity capital (means of production and labour power) into productive capital, 14 a technique allowing for more efficient extraction of surplus value from workers . 15 Conclusion

Competition permeates capitalist society because capitalism is a class society . Capitalism pits worker against worker and firm against firm because it is driven by capital's relentless search for surplus value, which can only be produced through its extraction from workers by capitalists . Competition among workers is but a form of the competition between capital and labour over the rate of surplus value and over the extent to which production and consumption should be determined by the imperatives of capital, i .e . the self-expansion of value, rather than by the development and satisfaction of human needs . Competition, and the waste of physical and human resources which it entails, can only be eliminated through the elimination of capitalist relations, including the wage labour-capital relation (Marx, 1978 : 141) . This can only occur through the elimination of both competition among workers and the capitalist monopoly over the means of production . Capitalist competition is socially progressive to the extent that it creates the material conditions for cooperative, class-interested behaviour among workers through development of the forces of production and the social division of labour . Unlike bourgeois economic theory, for which competition is ahistorically and tautologically defined as the interaction of individual agents in the market, Marxist theory emphasises that capitalism is a competitive society because it is an exploitative, class-divided society .



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1. Marx (1973 : 414) noted that for previous economists, `free competition . . . [had] been understood only negatively : i .e . as negation of monopolies . . . This section owes much to the work of Weeks (1981, Chapter 6) 2. and especially Bryan (1985) . The analysis of competition among workers, and the discussion of capital-labour competition in terms of the circuit of industrial capital, are specific to the present paper . The struggle over the working day continues throughout the 3. history of capitalism, as capital penetrates new regions and sectors and/or gains access to new supplies of labour power (e .g . Mexican migrants to the us) which are less able to resist lengthening of the working day than are other factions of the working class . (See also note 4 immediately below .) 4. As Marx (1967, Vol . I, Part 5) notes, mechanisation also produces pressures by capital towards a lengthening of the working day in order to decrease the time during which fixed capital lies idle . These pressures appear concretely in the conflicts between capital and labour over forced overtime and overtime wages . See Bahro (1981) for extensive discussion of the concept of `surplus 5. consciousness' . 6. This must be understood on the global level, as nationalist ideology and the mobility of capital encourage workers to compete with - and at times even to fight and kill - workers in other nations . Ultimately, collective working-class actions can only succeed to the extent that workers are united on the world level (Marx & Engels, 1968 ; Smith, 1984) . Marx (1967, Vol . III) uses the term `cost price' (rather than unit 7. cost) to emphasise the fact that prices of production (and market prices) are analysed at a lower level of abstraction than capital in general . At this lower level of abstraction, the prices of means of production and labour power will in general differ from their values, even though the aggregate value produced cannot be altered by these price-value deviations . 8. The development of this financial division of labour, in which banks fulfil the function of mobilising and allocating money capital, is dependent upon the development of surplus value production in industrial capitalist firms . For example, mechanisation of production causes an increased share of value flows to take the form of temporarily idle depreciation funds, which can be mobilised and allocated by the banks . More generally, the surplus product necessarily takes on the form of money under capitalism, and this facilitates money capital flows among individual capitals which serve as the basis for the profitability of the

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mobilisation and allocation functions of the banks . For a full analysis of the reasons why money capital becomes concentrated in the banks as capitalist development proceeds, see Marx (1967, passim) and Harvey (1982) . For simplicity, the present analysis assumes that the banks can be treated as a single industry . We also abstract from consumer credit . (But see note 11 below .) 9. For example, if the rate of profit in the banking sector is greater than the average rate of profit, money capital will be attracted into the banking sector . This will increase the supply of loans, causing a decreased rate of interest, i .e . a movement toward the banking sector's price of production - which is the same thing as a movement towards the average rate of profit . 10 . For simplicity the following analysis assumes that the trade industry can be treated as a single sector, abstracting from complications arising from differentiation within this sector (e .g . wholesale versus retail trade) or from the fact that some trading activities are undertaken in industrial capitalist firms while others are undertaken by firms specialising in the buying and selling - as opposed to the production of commodities . It should also be noted that the trade industry does not include the transport of commodities, which is an industrial activity . 11 . Note that even though some of the profits appropriated by trading firms (and by industrial capitals conducting trade operations) are appropriated from individual consumers, this has no a-priori implications for the shares of total value appropriated by the capitalist class and the working class . This is simply because consumers include both workers and capitalists . The same result would apply to the allocation of money capital toward consumer credit by the banks (or by industrial capitals conducting banking operations) . This reflects the fact that the exchange operations of traders and usurers are not specific to the capitalist mode of production . Nevertheless, under capitalism the rate of profit on such operations is tendentially regulated by the average rate of profit in the circuits of industrial - i . e . surplus value producing - capital . 12 . One form which this competition takes is the competition among state and local governments for capitalist investments, a competition fought with tax breaks, subsidies, and various measures toward decreasing the combativity of workers . For empirical analyses of this competition, see Burkett (1984) and Heil (1978) . 13 . Most generally, the intra-industry competition among capitals presumes commodity production and exchange, which can only be systematically developed through expansion of the class structure specific to capitalism : propertyless workers selling labour power to a capitalist class holding a monopoly over the means of production (Marx, 1967, Vol . I, Parts 1-2) . Thus, intra-industry competition is structurally dependent on the competition between workers and capitalists over the rate of surplus value production . What follows in the text can be viewed as an attempt to outline some of the specific relations through which this structural dependency is reproduced . 14 . Of course, the appropriation of surplus profits by industrial capitals is not always based on monopolies over lower cost production techniques . Where other factors (e .g . product differentiation through advertising) are involved, our previous analysis (on the inter-industry level) of the tendential regulation of the profits from trade by the average rate of profit applies a-fortiori .

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15 . Our analysis would not be substantially modified if the surplus profits were shared by several firms enjoying lower cost production techniques than their competitors . The bourgeois theory of markets has of course analysed the pricing decisions of such groups of `oligopolies' or `monopolistic competitors', but without relating the existence of these `market structures' to the class relations of capitalism as in the present analysis . This is in part because bourgeois theory takes production technology as given rather than analysing its class content .

Bahro, Rudolf (1981) The Alternative in Eastern Europe . London : Verso. Braverman, Harry (1974) Labor and Monopoly Capital . New York: Monthly Review Press . Bryan, Richard (1985) `Monopoly in Marxist Method' . Capital & Class, 26 . Burkett, Paul (1984) `A Note on State and Local Government Expenditures in the United States, 1968-1981' . Economic Forum, Vol . 15 . Clifton, James (1977) `Competition and the Evolution of the Capitalist Mode of Production' . Cambridge Journal of Economics, Vol . 1, June . Clifton, James (1983) `Administered Prices in the Context of Capitalist Development' . Contributions to Political Economy, Vol . 2 . Dugger, William (1985) `The Continued Evolution of Corporate Power' . Review of Social Economy, Vol . 43, April . Harvey, David (1982) The Limits to Capital. Chicago : University of Chicago Press . Heil, Brad (1978) `Sunbelt Migration' in us Capitalism in Crisis . New York : Union for Radical Political Economics . Hirshleifer, Jack (1970) Investment, Interest and Capital . New Jersey : Prentice-Hall . Lebowitz, Michael (1977-78) `Capital and the Production of Needs' . Science and Society, Vol . 41 . Levine, David (1980) `Aspects of the Classical Theory of Markets' . Australian Economic Papers, Vol . 19, June . Mandel, Ernest (1975) Late Capitalism . London : New Left Books . Marx, Karl (1967) Capital (3 Volumes) . New York : International Publishers . Marx, Karl (1973) Grundrisse . New York : Vintage Books .

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Marx, Karl (1976a) Wage Labor and Capital . New York : International Publishers . Marx, Karl (1976b) Value, Price and Profit . New York: International Publishers . Marx, Karl (1978) The Poverty of Philosophy . Peking : Foreign Languages Press. Marx, Karl & Engels, Frederick (1968) The Communist Manifesto . Brooklyn : New York Labor News . McNulty, Paul (1968) `Economic Theory and the Meaning of Competition', Quarterly Journal of Economics, Vol . 72, November. McNulty, Paul (1984) `On the Nature and Theory of Economic Organization : The Role of the Firm Reconsidered' . History of Politcal Economy, Vol . 16 . O'Connor, James (1984) Accumulation Crisis . New York : Basil Blackwell . Panico, Carlos (1980) `Marx's Analysis of the Relationship Between the Rate of Interest and the Rate of Profits' . Cambridge Journal of Economics, Vol . 4 . Rosdolsky, Roman (1977) The Making of Marx's `Capital' . London : Pluto Press . Semmler, Willi (1984) Competition, Monopoly and Differential Profit Rates. New York : Columbia University Press . Shaikh, Anwar (1978) `Political Economy and Capitalism : Notes on Dobb's Theory of Crisis'. Cambridge Journal of Economics, Vol . 2 . Shaikh, Anwar (1979) `Notes on the Marxian Notion of Competition' . Unpublished paper . Shaikh, Anwar (1980) `Marxian Competition Versus Perfect Competition : Further Comments on the So-Called Choice of Technique' . Cambridge Journal of Economics, Vol . 4 . Smith, Neil (1984) Uneven Development. New York : Basil Blackwell. Weeks, John (1981) Capital and Exploitation . Princeton : Princeton University Press . Wolff, Richard, Callari, Antonio & Roberts, Bruce (1984) `A Marxian Alternative to the Traditional "Transformation Problem" ' . Review of Radical Political Economics, Vol . 16 .

Competition and monopoly 209

RICHARD BRYAN

Competition and monopoly : A reply

COMPETITION IS central to Marx's theory of value and a pervasive

aspect of capitalist accumulation . From this perspective, the purpose of my earlier paper (Capital & Class 26) was to argue that monopoly must be understood as a form of competition . Hence, monopoly requires recognition within the theory of value, rather than as an aberration found in the `real world' . In developing this proposition, I drew the distinction between `competition in general' and `concrete competition' . The former exists at the level of abstraction of Marx's `capital in general', devoid of individual capitals, while the latter, at a lower level of abstraction, addresses the appearance of competition as relations between individual capitals . Three general points were seen to follow from this . First, the principles of competition in general have a real existence, so that all analysis of concrete competition must be directly compatible with the abstract level . Second, it follows, competition cannot be reduced to relations between individual capitals in the market place, but involves, more generally, the process by which value circulates . Third, the analysis of monopoly at the concrete level should not be restricted to the identification of the power of large individual capitals . Monopoly must be understood as any nonequivalence in the circulation of value . Jane Wheelock's response to my paper raises some important points for consideration, not least of which is the general proposi-

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tion of the desirability of making a Marxist theory of competition and monopoly useful for empirical analysis . While I concur with the proposition, I shall contend that Wheelock's approach is not appropriate to this task, precisely because it fails to recognise the central arguments of my earlier article . However, before responding directly to Wheelock's contribution, it is useful to raise a point discussed in the article of Paul Burkett . Burkett provides a useful exposition of the multiple dimensions of capitalist competition . Yet in addressing the capacity of individual capitals to achieve surplus profits by producing with costs of production below the norm (what I earlier called 'monopoly in production'), Burkett makes a common oversight, found also, for example, in Mandel's introduction to Volume 3 of Capital (1981 : 58) . He contends that `these surplus profits will tend to disappear as the low cost of production is generalised . In this case the above average rate of profit is temporary' . This is indeed true for the individual capital, but not for total capital . Insofar as capitalist competition constantly revolutionises the forces of production, there will always be some individual capitals with costs of production below the norm . Thus, at the level of total capital, these surplus profits do have a permanent existence . The oversight appears to derive from the fact that this analysis of monopoly starts from individual capitals, not capital in general . The effect is to (falsely) identify monopoly in production as a temporary phenomenon : the corollary is to focus the analysis of monopoly almost exclusively on power in the market place (monopoly in exchange) . This point, although it appears trivial, illustrates the importance of ensuring the compatibility of analysis at the levels of capital in general and individual capitals . It also signifies, as we shall see, an essential limitation in the approach of Jane Wheelock . Wheelock begins with Uno's three levels of abstraction : pure value theory ; stages of capitalist development, and the actual state of capitalism . She contends that my paper addresses the first, most abstract, level and denies the importance of the periodisation of capitalism (Uno's second level) . Although my paper is formulated in an abstract way, it does not preclude the importance of either periodisation or concrete analysis . It does, however, contend that a dichotomy between monopoly and competition obfuscates useful periodisation and systematic concrete analysis . For Wheelock, monopoly enters analysis only at Uno's second level, as a basis of periodisation . But where has monopoly come from? How does an historical dimension construct the category of monopoly? If monopoly is absent from the `pure' theory of value, it must be seen as a non-essential dimension of

Competition and monopoly accumulation . It can enter analysis only as a theoretical aberration . Yet, as we have illustrated in relation to Burkett's paper, monopoly cannot be relegated in this way . It is crucial to the development of the forces of production, and thus must be part of a `pure' theory of value . It follows directly that the juxtaposition of competition and monopoly provides an inappropriate basis on which to periodise capitalist development . If monopoly has a recognised presence within the `pure' theory of value, it must also exist within the so-called `competitive' stage of capitalist development . How, then, are the stages of competition and monopoly differentiated? To pose the point more concretely, if the tendency towards the concentration and centralisation of capital, the attempt by individual capitals to reduce their costs of production, and differential rent (i .e . various processes of monopoly) are all inherent in accumulation, they cannot be relegated to just the later, monopoly, stage of capitalism . Moreover, as Weeks (1986) emphasises, if capitalism is being constantly transformed by these processes of monopoly, in what sense can `competitive' capitalism be called a stage? Jane Wheelock's periodisation requires that nineteenthcentury capitalism be seen as the `golden age' of self-reproducing free competition where all profit rates equalised . It seems that this theory falls uncritically into the neoclassical myth . The objection to the competition-monopoly division does not deny absolutely a role for periodising capitalism . But it does suggest that the continuities between stages should not be underestimated . It also suggests that the criteria for the identification of stages must be found within capital in general, not in relations between individual capitals . It appears that Wheelock has first assumed the centrality of the division between competitive and monopoly capital and then ordered an interpretation of capitalist development around it . Indeed, it is only by this assumption that competition and monopoly can operate for Wheelock in definitionally incompatible roles, both as discrete historical stages of capitalist development and as coexisting sectors of the monopoly stage . The critique of the competition-monopoly division as a basis for periodising capitalism applies equally in the context of concrete capitalism (Uno's third level) . Here, as I argued in my earlier article, the focus on individual capitals, and their division into `sectors' of monopoly and competitive capitals, tends to focus exclusively on power relations in the market . It `loses contact' with the unifying role of competition in the accumulation of capital : a role defined at the level of capital in general . Exactly the same problem arises in the division of individual capitals into fractions of banking, industrial and commercial

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capitals as a means to explain the structure of concrete competition . This, too, is a division which confuses the levels of individual capitals and capital in general . Money, production and commodities were seen by Marx as distinct forms taken by social capital in the process of its circulation and reproduction : they were not seen by him as the basis on which individual capitals specialise and segment . Marx could not have been more explicit on this point when he stated : Money capital, commodity capital and productive capital thus do not denote independent varieties of capital, whose functions constitute the content of branches of business that are independent and separate from one another . They are simply particular functional forms of industrial capital, which takes on all three forms in turn (1885 : 133) . This indicates that the distinction between money, production and commodities in the circuit of capital cannot be simply transformed into the institutional roles of banks, industry and commerce respectively, in the belief that this will suffice for a Marxist framework for the analysis of concrete competition . This exercise appropriates categories from the level of capital in general and assumes that individual capitals specialise in one function or the other . Yet this cannot have substantial meaning from the perspective of individual capitals, for it suggests that `commerce' does not involve money, and that `industry' does not involve commodities? A division of individual capitals into the roles of banking, industry and commerce cannot be said to reveal any necessary underlying structure to the process of concrete competition . These concerns with the division of capitals into competitive and monopolistic, or banking, industrial and commercial are not raised simply to be pedantic . My purpose is to point to the problems which follow from posing concrete competition in terms of the interaction between enterprises categorised by `size' and/or `specialisation' . The effect is to prematurely delimit the processes by which value moves and to construct arbitrary rigidities in the patterns of circulation . This rush to institutionalise the categories of capital in general in a formalistic way can only limit the explanatory power of Marxism by assuming that concrete competition occurs through predetermined structures of relations between individual capitals . There are two important points to be emphasised in posing competition as a relation between individual capitals . First, the process of competition does not occur only between individual capitals, but also within individual capitals : a matter I raised in my article . Second, in investigating concrete processes of com-

Competition and monopoly petition between individual capitals, the object of Marxist analysis (as Wheelock implicitly concurs) is not to explain the determination of market prices, but to identify how competition regulates relations between individual capitals of different `characteristics' . Yet it should be clear that capitals do not divide consistently according to the characteristics of `size' or specialisation in the circuit of social capital . On issues of state regulation of the conditions of competition, for example, individual capitals divide in different ways over the exchange rate from over the bond rate . The task of a theory of competition for the concrete analysis of such issues is to identify how such interventions transform the rate at which value transfers between the forms of money, production and commodity capital (i .e . at the level of capital in general) . The division between individual capitals is the circuit of social capital . On the issue of the exchange rate, for example, capitals will divide according to whether they are importers, import-competing, or exporters (and the currency of their contracts) : that is, according to their particular role in the overall circuit, and the effects of this role on individual profitability . This will reveal divisions between capitals which are much more `issue specific' than those which could result from the approach advocated by Wheelock . 'Issue-specific' divisions are required because it should not be assumed a priori that the divisions considered by Wheelock are the determining ones on all occasions . The basis of a materialist approach to 'issue-specific' divisions is that such issues must be interpreted in terms of their origins in the circuit of social capital . From this proposition, the connection between abstract and concrete analysis of competition becomes clear. The function of an abstract theory of competition is to provide the method by which to construct the concrete divisions between individual capitals within the circuit of social capital . So while I agree with Wheelock's concern to develop the theory of competition in a way useful for concrete analysis, the question is whether such analysis is aided or hindered by periodising capitalism into stages of competition and monopoly and classifying individual capitals as monopolist and competitor . The point of my earlier article was to suggest that this taxonomy bears little relation to the process by which value circulates (i .e . the process of competition) . It appears that, in both of her papers, Wheelock has only been able to assume the centrality of the taxonomy, but has not demonstrated its connection to the theory of value .

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Bryan, R . (1985) `Monopoly in Marxist Method' . Capital & Class 26 . Burkett, P . (1986) `A Note on Competition Under Capitalism' . Capital & Class 30 . Mandel, E . (1981) Introduction to K. Marx, Capital, Vol . 3 . Penguin . Marx, K . (1885) Capital, Vol . 2 . Penguin, 1978 . Weeks, J . (1986) `Epochs of Capitalism and the Progressiveness of Capital's Expansion' . Science and Society, Vol . XLIX, No . 4 . Wheelock, J . (1983) `Competition in the Marxist Tradition' . Capital & Class 21 . Wheelock, J . (1986) `Competition and Monopoly : A contribution to debate' . Capital & Class 30 .

Competition and monopoly 215

GEOFFREY KAY

Macroeconomics and Monopoly Capitalism Review article THE FIRST difficulty facing a critic of economics is the sheer volume of the literature and its division into specialised branches of study . One of these, macroeconomics, is of relatively recent origin : as a distinct area of study it is scarecely fifty years old, yet already it is subdivided into distinct and opposing tendencies . The first task of wading through the material ; sorting it under appropriate heads ; identifying the real developments which have led to diversification ; and discovering common themes in order to define an object of criticism ; is already enormous . The second task of criticism itself- demonstrating theoretical inconsistencies and showing how these lead to defective analysis - is hardly less daunting . But if this is not enough a third problem awaits which gradually overshadows everything else : how can the criticism be expressed? How can Marxists claim the attention of professional economists and draw to their notice the limitations of their discipline when one of their most strongly held convictions is that Marxism has nothing to offer . `I had another shot at old K .M . last week,' Keynes wrote to George Bernard Shaw in 1935 . `But if you tell me that (he) discovered a clue to the economic riddle, still I am beaten - I can discover nothing but out-of-date controversialising .' In their recent book, Macroeconomics and Monopoly Capitalism, Ben Fine and Andy Murfin take on the thankless job, and they are to be congratulated for their efforts in regard to the first

Ben Fine and Andy Murfin : Wheatsheaf Books, Brighton, 1984, pp . 170

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two tasks . They present a masterly summary of the development of macroeconomics since the General Theory : the more technical issues are split off into separate sections, and a non-specialist should be able to follow their arguments . Their detailed criticisms of different schools of thought - Keynesianism ; monetarism ; the work of Kalecki and his followers ; and post-Keynesianism - are precise and telling . But they stumble at the third hurdle for reasons which say a lot about the present state of Marxist theory . One can see the problem and sympathise . If the critique is too open and scathing, it will be dismissed out of hand ; if it makes too many concessions, it risks becoming limp and anodyne . The anxiety evident in the authors' statement of intent makes this dilemma clear : Whilst our own approach to an assessment of economics and to the econmy is informed by Marxist political economy, our intention has not been to justify this nor convert the reader to our way of thinking . Rather our intention has been far more modest : to attempt to convince economists of the need to broach new problems and correspondingly break with conventional theory . To avoid alienating readers in advance they adopt the diplomatic approach : but this limits the force of the criticism from the outset, letting economists off the hook, in the same way that even English batsmen could probably cope with the West Indian pace attack if it bowled underarm . There is one ball in the Marxist repertoire which, when pitched on line and length, is unplayable . Economists can cope with the normal run of criticism by the time-honoured means of confusing the issue and suggesting that it is only a special case of their general theories . But the one point they cannot deal with is the criticism that they mistake labour for labour-power, and thereby blind themselves to the nature of the most critical transaction of the capitalist economy . The exchange of labour-power takes place between formal equivalents : the worker and the capitalist meet in the market on the same equal terms as other traders . But the real content of their transaction is power and subordination : one party places his capacities and therefore himself at the disposal of the other . The substitution of labour for labour-power covers this aspect of wage-labour over . Suggesting that workers are paid for what they do (productivity), measured in terms of physical output or revenue, it creates the impression that the object traded on the labour-market is external to the worker and not an integral aspect of his personality : hence that its alienation is really no different to that of any product . In one simple move, so effective because it appears so realistic, the

Competition and monopoly

replacement of labour-power with labour removes the class nature of capitalist society beyond the horizon of economic theory and squares it with the formalised dogmas of liberal democracy . But at the same time, it removes the realities of capitalist society beyond the scope of economic analysis, which is then compelled into ever greater complexity as developments inevitably fail to conform to its defective theories . Most of the defects in macroeconomics which Fine and Murfin identify, can be traced to this original error : but this is not the standpoint from which they start their criticism . It is easy enough to understand why, for a digression on the nature of labour-power hardly recommends itself as the point at which to start a book intended to persuade professional economists `to break with conventional theory' . It has the double disadvantage of revealing too much too soon, allowing the reader to discount what follows in advance as `just another Marxist criticism' ; and, at the same time, of appearing abstract in the worst sense . By contrast an account of the monopolistic structure of the economy appears an altogether more suitable starting point : it is seemingly concrete ; its importance cannot easily be disputed by economists and it brings to light all manner of inconsistencies in their theorems . But Fine and Murfin would seem to have had more than tactical considerations in mind in choosing to begin here . Their title alone indicates their belief in the importance of monopoly as the crucial issue which macroeconomics fails to grasp : alongside state economic intervention, the multinational corporation, is adduced as `crucial in understanding the character of contemporary capitalism' . But whether this is true or not - for the sake of argument the point can be conceded : the fact remains that it gets the book off on the wrong foot . It is not just that the opening chapter is unconvincing and creates an impression that its authors favour `stale descriptive analysis', which they feel necessary to deny right through to the end . It is that the emphasis on monopoly detracts from the main issue and prevents the authors from consolidating their critique . The development of monopoly occurs at a definite phase in the development of capitalism . The case against economics is not simply its failure to grasp this phase, but its complete misapprehension of capitalism as such . As Fine and Martin develop their argument it becomes clear that this is the most important criticism they level against macroeconomics . But, the importance they attach to monopoly confuses the issue . It is one thing to argue that monopolisation is a crucial feature of modern capitalism and to make a provisional criticism of macroeconomics for its failure to recognise their development . It is another to posit monopoly capitalism sui generis, and not

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carry the criticism further . For, although the idea appears exemplary, its value as a standpoint of criticism can be questioned, on the grounds that it conflates general and particular aspects of capitalism in the same way as orthodox economics, and is therefore unable to put the shortcomings of this doctrine into proper perspective . Corresponding to the distinction between capital-in-general and many capitals, a clear line can be drawn in Marx's work between general theory and the analysis of particularities . The former is concerned with the nature of the categories of capitalist production - capital, labour, profits, wages, etc . - and the terms on which they relate to each other (the theory of value) . It abstracts from particularities and analyses economic relations with capital and labour treated uniformly . The latter removes this abstraction and recognises individual capitals as particular interests . The relation between general theory and the analysis of particularities remains an area of great difficulty and dispute, since the two do not correspond to each other directly . However, it is certain that within Marxist theory the problems of competition and monopoly belong, by definition, to the sphere of the particular . In orthodox economics the line between the two spheres of theory is less tightly drawn : for all intents and purposes it is not drawn at all ; and the two layers of theory are compressed together on to a single plane of abstractions where they give rise to incongruities which can never be properly apprehended . Ricardo's inability to reconcile the particularities of different capitals with his general theory of value can be traced to this source: the unbridgeable gulf between micro- and macroeconomics is one example of the difficulties it creates for modern theory . A second is the prominence given to competition . For, insofar as orthodox economics makes use of general categories, it falsely includes competition in their ranks - an error which is not made sufficiently clear by Marxist criticisms which take monopoly as their standpoint . Significantly, it is not the compression of the general and the particular on to a single plane of abstraction (the model), which has led to the exaggerated importance which economists attach to competition (and Marxists to monopoly) : rather it is a preconceived notion that competition is a general category of capitalism which spawned the method . For the broader area from which the central importance of competition arises, precedes economic theory logically, just as it anticipated it historically ; namely that modern society is an aggregate of fully developed individuals . It was this idea that lay behind the efforts of political philosophers in the seventeenth and eighteenth centuries to explain the origins of the political state through the metaphor of a social contract .

Competition and monopoly Starting his analysis with a rude state where the institution of `improved' society are absent, but men nonetheless trade with each in a systematic fashion which presupposes the law of private property, Adam Smith introduced the notion into economics where it has remained unchallenged to this day . It is no longer common for economists to refer to the state of nature, but the notion which arose from this conjecture, that the capitalist economy consists of independent `agents' who shape its order and development through the exercise of independent wills, is still the touchstone of orthodox thought. It is, after all, the very essence of bourgeois thought and the object of much of Marx's own critical work . Rejecting the idea that the `agents' of modern society are natural men, i .e . that fully formed individuals with independent wills are data, Marx turned to the character of the social order which created the modern individual and gave it theoretical purity . To understand the operation of a society in which such crucial activities as production are organised by individuals in their own interests, it is necessary to understand the conditions which establish these individuals in the first place, if only because they have to be continually reconstituted through the self-concerned actions of individuals, even though they may be completely unaware of the fact . In other words, the establishment of the social order is not a remote historical event, but an ongoing process which is embodied in individual actions as both motor and constraint . It is the undisclosed premise and result of competition (and monopoly) whose significance cannot be properly grasped except in relation to capital-in-general . There is no doubt that the development of monopoly has cast economists into the role of 'Euclidian geometers in a nonEuclidian world', to use Keynes's phrase, and brought to light hitherto unsuspected inconsistencies in their theorems . But these inconsistencies are only manifestations of a much deeper malaise which Fine and Murfin confront directly when they drop their academic inhibitions late in the book with a devastating critique of the chic radicalism of post-Keynesian/Kaleckian theory . The recognition afforded to Marx by this tendency, amounting in some quarters to the claim to have reset Marxist politics on a more secure economic foundation, appears to liberate their critical enthusiasm . Singling out the work of Cowling for special attention, they finally bring a Marxist position out into the open : His (i .e . Marx's) analysis of capitalism is founded on the study of the relationship between capital and labour directly and as a conflict over production (rather than exchange or distribution) . . . Consequently capital and labour compete

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as classes over the exchange of labour power as a commodity (p . 138) . But shifting the locus of class struggle back to the sphere of production is only the first step, and sadly it is not followed up . Consider the following, which is a fair summary of the position which Fine and Murfin counterpose to macroeconomics . . . . there is a competition between the two classes over the production of (surplus) value as a precondition for any competition involving the distribution of commodities and income in exchange as prices, wages, profits or other forms of revenue . (p . 138) Give or take doubts about the use of the term `competition' in this context, Marxists may accept this position, but it is only a provisional statement . The way in which `competition' over the production of surplus value actually affects the distribution of income is not made clear : if fact, it is a serious gap not just in this work, but in Marxist theory generally . But even so, it would have still been possible for Fine and Murfin to make their point more sharply and show that it is not simply the struggle between capital and labour once they are brought together in production which is decisive, but the preconditions of this struggle, the determination of the capacity of labour as a commodity without which capital and labour would not meet in the first place . These preconditions which mould every facet of social life, directly or at one remove, and ultimately determine the movement of the economy, are definitively absent from the models through which economists view the world, since they do not properly recognise that it is labour-power, and not labour, which is the object of commerce between the classes . Marxists usually take great care to state that workers sell labour-power and not labour ; but the implications of this distinction are rarely considered in the detail they deserve, although they provide more devastating ammunition for the critique of economics than the degree of monopoly . If anything, a concern with monopoly is counterproductive since it deflects attention from them . Certainly it is possible to construct a strong prima facie case that the problems which preoccupy macroeconomists, originate in the peculiar nature of labour-power as a commodity . In order for there to be a labour-market, there must be a class of persons unable to satisfy their needs directly by their own capacities ; not just individually because of the division of labour, but collectively because of the appropriation of the conditions of labour as capital . In other words, capitalist production presupposes as a condition of its existence which it must then

Competition and monopoly reproduce as a condition of its survival, the separation of the needs and capacities of the class which produced wealth . Imbalances between production and consumption ; disequilibria giving rise to inflation or unemployment ; may be shaped by the conditions which macroeconomists include in their models ; but there are convincing grounds for believing that they originate in conditions which these models systematically misrepresent . The history of macroeconomics as a distinct branch of economics goes back to Keynes and the General Theory . From the start it was concerned with disequlibria which neoclassical theory could not envisage ; with imbalances between supply and demand that signal misalignment between production capacities on the one side and the needs of the population on the other . But it never recognised that the phemonena it sought to explain are structurally identical to the conditions which define labour-power as a commodity ; and it has never explored the possibility of a connection between them . Admittedly the identical structure of the conditions which define labour-power as a commodity, and the phenomena of economic stability, cannot be interpreted as more than an interesting analogy until the connections between them are properly established . Until the analysis is worked out, the claim that economic instability is the natural expression of wage-labour can only be accorded the status of a provisional hypothesis . It is, however, a hypothesis which macroeconomists cannot even consider because of their absolute commitment to an equally provisional hypothesis that wage-labour is a rational mode of appropriating needs . The development of monopolies and the inbalances to which they give rise provide clear evidence of the limits of bourgeois rationality, both in practice and in theory . But they do not reveal the origin of these limits in the mode of production ; and theoretical criticism based upon them is inevitably partial and incomplete . Had Fine and Murfin attached less importance to monopoly and rooted their work in an analysis of wage-labour, most of the detailed charges they level against macroeconomics would have needed no amendment since they fit easily into the alternative framework . As an imminent critique of economics, their book is extremely valuable ; but as a substantive criticism it falls short of the mark . Their assessment of Keynesianism is disappointing, since they fail to consider its real importance as an attempt to domesticate the class struggle . An assessment of Keynes's personal contribution is no alternative for a proper historical judgement of the significance of theoretical and practical developments, which, for better or for worse, bear his name ; and observations such as `Keynes's immediate influence was brought to an end by his death in 1946' hardly qualify as profound . But their critical

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accounts of monetarism and various versions of post-Keynesian theory are clear, direct and masterful . If the book was intended to encourage economists to open their minds to alternative theories and possibly even look to Marxism, one suspects habits of thought, otherwise known as prejudices, are so deeply ingrained that the authors will be disappointed . Sadly, the most likely response to their efforts will be complaints by disgruntled Marxists .

Black American Politics : From the Washington Marches to Jesse Jackson M . Marable

London, Verso, 1985 . 366 pp . £18 .50 h/b, £5 .95 p/b, ISBN 0-86091 108 X h/b, 0-86091 816 5 p/b Reviewed by Peter Burton and Richard Child Hill an historical dialectic to Black liberation movements in the United States . Suspended between a lost African culture and a forbidden European one, Blacks have struggled for power on two fronts . The Black liberation movement has always been anti-racist, therefore against racial segregation, and to that extent, integrationist . Yet black empowerment also means affirming Afro-American cultural and social integrity, and to that extent, the movement has been separatist and nationalistic . Integration and civil rights strategies tend to be stressed in times of racial optimism . Separatism, self-help and internal development come to the forefront in less hospitable periods . So argues Manning Marable in Black Ameri- 223 THERE IS

can Politics .

That this is an inhospitable period for Black Americans is readily in evidence . By almost any measure Blacks in the United States are poorer today than they were before the deep recession of 1979-

Capital & Class 224 1982 . Between 1960 and 1975, the Black poverty rate dropped from 55% to 31% . But after 1979, two million more Blacks became poor . Today, 34% of the Black community is in poverty, the poverty rate for Black female-headed households is 52%, and nearly half of all Black children are poor. Black infant mortality is twice as high as white ; in central Detroit the infant death rate is higher than it is in Honduras, one of the world's poorest nations . And the percentage of Black youth going to college has declined from about one-third in the mid-'70s to slightly more than onefourth last year . After two decades of relative quiescence, Black intellectuals are again challenging the civil rights agenda in the United States . Yet unlike the 1960s, the current challenge to civil rights political assumption has been led by a vocal bevy of Black 'neo-conservatives' . These Black intellectuals loathe the welfare state and argue that Black poor have suffered from it . They are against affirmative action and school busing for desegregation . They advocate free market capitalism and entrepreneurial values . And they hold that cultural patterns in the Black community - the `enemy within' according to Harvard economist, Glenn Loury - bears heaviest weight for Black economic stagnation today . The Adam Smith-Protestant Ethnic catechism promoted by Black neoconservatives is hardly original . What is new is their challenge to progressive Black intellectuals at a particularly vulnerable moment for the left . Black conservative credibility has been enhanced greatly by the failure of welfare state programmes to stem the rise in the Black underclass . What is needed right now is a critically minded, historically informed reassessment of Black political strategies and movements in the United States. And that

is what Manning Marable has set out to give us in Black American Politics . Black American Politics primarily focuses on the evolving intersection among three kinds of struggle : Black electoral politics, Black social movements, and revolutionary politics . Marable articulates the limitations of Black theory and practice as it has evolved out of Black political movements, including the boundaries on Black electoral politics set by a bourgeois democracy . He takes on the problem of a compromised and vascillating Black petit bourgeois leadership . And he takes Black leaders to task over the lack of a coherent programme which connects racial inequality to capitalist exploitation . This book is worth reading simply for Marable's rich and varied observations on black political history in the United States . But in this era of reactionary politics, it is Marable's controversial analysis of Black political tendencies that makes this an especially important book to read . Marable argues that the 1983 March on Washington, the election of Harold Washington as Mayor of Chicago, and the presidential campaign of Jesse Jackson represent progressive, even potentially radical, turning points in the development of black political theory and practice . Marable's argument is quite detailed and we can't reproduce it all here . But his line of reasoning is straightforward enough . Black social movements and electoral politics have gone through several phases in the United States . Each phase has been characterised by distinct relationships between Blacks and the capitalist state and among Black masses and fractions of the Black petit bourgeoisie . Each political configuration has also advanced a specific understanding and programme for social change . From Reconstruction to the 1970s, Black electoral politics consisted mainly of

Book Reviews

Black 'clientage' relationships with the two capitalist parties ; first with the national left of the Republican Party and later with the Democratic Party . Black tactics and programmes for change didn't conflict much with the basic assumptions behind a capitalist political economy . The Black bourgeoisie has heretofore dominated Black social movements and electoral politics . Black leaders have tended to oscillate between accommodating a national party and national capital and advocating reforms responsive to the grievances of black workers and the poor . Up until now, the political behaviour of accommodationists and reformers alike has mainly been guided by their shared class interests . But Marable thinks the depth of the social and economic crisis of the 1980s may have changed all that . Black reformers are now reexamining the contradictory position Blacks occupy in the us political economy . Three political events suggest a transformation in Black politics may be in progress . The programme of `Jobs, Peace and Freedom' in the 1983 March on Washington indicates that a large number of black organisers now see the connection between racism, the racial division of labour and the capitalist political economy as the critical political issue . Harold Washington's election in Chicago was also unique for several reasons . It was a Blackled social reform movement which used electoral politics as a vehicle . The campaign took on the exploitation of Black workers and related social ills including poor housing, health care and education . Washington attacked the Democratic Party from within the Party . He got widespread support from Black workers and the Black left and that support brought into the open the historic divide between Black accommodationists and reformers . As white Democrats fled into the Repub-

lican camp, the instability of the class 225 alignment constituting the Democratic Party was also thrown into relief . Jesse Jackson's `Rainbow Rebellion' also ushered in a new form of Black presidential politics . Jackson mounted a campaign that was neither third party nor swing vote oriented . It was a democratic, anti-corporate, anti-racist social movement led by Afro-Americans and targeted to urban electoral arenas . Marable links the Rainbow movement to a long line of antecedents : the 1965 Montgomery bus boycott, the Student Nonviolent Coordinating Committee (SNCC), the 1960 sit-in movement, and the 1963 Birmingham desegregation campaign . Jackson has managed to combine the politics of moral imperative, the idea of self-help, and an emphasis on Black power not just institutional access . Bringing Black protest, integrationist and Black nationalist traditions together, the 1983 March for `Jobs, Peace and Freedom', Harold Washington's Mayoral victory in Chicago, and Jesse Jackson's Rainbow Coalition all indicate there's an anti-racist, anti-capitalist political movement afoot in the United States today .

Capital & Class 226

The crimes that Benn and Fairley attributed to the MSC are many . It is being used to

Challenging the MSc on jobs, Education and Training Caroline Benn and John Fairley (eds) London, Pluto Press . 281 pp . £5 .95 p/b . ISBN 0-7453-0095-2 Reviwed by John Wrench ACCORDING to the editors of this volume there is one thing which unites the thirteen contributors : the belief that the activities of the Manpower Services Commission `are now so potentially disastrous that Britain's social wellbeing and economic recovery require a complete break with its present policy' . Different chapters of this volume cover separate aspects of Msc activities including YTS, TVEI, tertiary education, and adult education, with further sections which consider implications for women, ethnic minorities, trade unions and the local community . The book describes how the Msc, once valued by the trade union movement as one step closer towards the goal of a centralised labour market planning agency, has now, in the face of the havoc caused by monetarist policies and the malfunctioning of international capitalism, mutated into a vehicle for dampening social aspirations and `cooling out' people into accepting the `normality' of job losses, intermittent worklessness and low wages .

`smash apprenticeship training, undermine the Industrial Training Board tradition of planning, corrupt comprehensive education, harness the curriculum to commerce, deskill thousands of workers, push trade unions to the margin of debate, exclude many women and most blacks and Asians from the best jobs, depress wages, and redefine poverty downwards-while protecting the privileges of all elites and diverting everincreasing public funding to private education, private training and private employers .' The argument and evidence of subsequent chapters in the book confirm that this catalogue of accusations should not be dismissed as mere labour movement paranoia . Behind the Msc's `veneer of credibility' - the expensive publicity material, the glossy brochures which proclaim the revolution of high quality vocational training in an age of new technology, the apparent enthusiasm for equal opportunities - there lies a different reality: a method of massaging unemployment statistics, a training programme which more often than not imparts superficial skills which can be acquired in days rather than months, with meaningless certification, and the perpetuation of race and sex inequalities, hardly surprising in a market-led, employer-oriented system which provides no real incentive for employers to abandon their old prejudices in recruitment practices . Different contributors spotlight the retrograde effects of Msc interventions in their respective areas . How is it that in such a short time the Msc has managed to turn back advances made by trade unionists and progressive educationalists that

Book Reviews took decades to consolidate? The acquiescence of trade unionists and teachers within MSC programmes has not simply reflected a reluctant pragmatism on their part . There has also been the seductiveness of MSC publicity and PR (Saatchi and Saatchi selling YTS), a facade of compassion (a concern for the young unemployed) and a hi-jacking of some of the vocabulary of progressive educationalists (a critique of `over-academic' learning) . Irresistible to many cash-starved local authorities has been MSC funding, which may carry with it long-term risks . In the chapter on the Technical and Vocational Education Initiative a Leicestershire college principal is quoted as likening TVEI to a Trojan Horse : `it is a beautiful and attractive gift, which has already seduced and bemused many ; but when we are least expecting it, the supporters of grammar schools, selective education, privilege and elitism will come pouring from its belly, and the citadel of ,comprehensive education will be lost .' The MSC has also played on the sectionalism within the trade union movement arising from their differing relationships to the arenas of education and training, and the different interests of their memberships . A common theme to a number of contributors is the demoralisation and confusion caused at grass roots level by the participation in, and legitimation of, MSc programmes by the TUC . There are pleas for a TUC-led opposition to MSG activities (though not a total boycott) : there is seen to be room for successful challenges within MSc programmes with, for example, much work that could be done by those in a position to fight for equal opportunities for young women and ethnic minorities . Effective collective action is particularly necessary if gains are to be made, given the absence of any proper machinery for democracy on Msc programmes . Nowhere

is there anything approaching democratic accountability : on YTS there is virtually no room for discussion or feedback from ground level ; TVEi has permitted centralised government manipulation of the school curriculum unheard of in previous years . As Benn and Fairley comment, it is an irony that in order to promote a "free" economy so much denial of freedom and such dictatorial methods beyond precedent in recent history - are having to be used .' The quality of contributions to ChalMSG is rather variable, ranging from original research-grounded or theoretically-guided critiques to short descriptive pieces more characteristic of a

lenging the

newspaper feature article . As most of the contributions stand as self-contained articles in themselves there is unfortunately much overlap and repetition, particularly on the historical material describing the origins and growth of the MSG and the trade union movement response to it . A heavier editorial hand would have much improved the volume, as would the addition of a subject and author index . No doubt these are faults born out of haste, when further editorial intervention was sacrificed in a desire to get such a topical collection of articles out as soon as possible . Despite these faults, the book should prove to be useful and informative to activist and academic alike . It goes further than a critique of the MsCas Benn and Fairley say, `Bad ideas are not defeated by continuing to say how bad they are, only by good ideas .' It is recognised that there is no going back to the pre-MSC status quo, particularly since part of the Msc's success lies in its exploitation of the undeniable injustices and inefficiencies in the old apprenticeship system and the failure of schools and FE colleges to respond to popular demand . This is

227

Capital & Class 228 now the time for a few `good ideas' on the

post-MSC alternative policy on jobs, training and education, and this volume provides a valuable and timely contribution to such a debate .

The Local Politics of Race G . Ben-Tovim, J. Gabriel, I . Law and K . Stredder

Macmillan, Basingstoke, 1986 . ISBN 0-333-37119-4 . £6 .95 Reviewed by Bob Carter IN HER RECENT, excellent work The Retreat From Class, Ellen Meiksins Wood des-

cribes a new `true' socialism . Its most distinctive feature, she avers, is `the autonomisation of ideology and politics from any social basis and, more particularly, from any class foundation' . A major consequence of this position, argues Meiksins Wood, is that, since there exist no social interests and no social capacities which are more conducive to socialism than are any others, politics, and history in general, become random and contingent . Everything, or nothing, becomes possible . Meiksins Wood characterises this as the `politics of absolute contingency' ; it captures well the stance adopted by the authors of this book .

Drawing on their involvement in community relations councils and the local Labour Party in Liverpool and Wolverhampton, the authors give an account of intervention in local, antiracist politics . They focus on the role of CRCs and the Labour Party branch as channels for political change at a local level . Their extensive experience in these organisations provides the basis for a critical `inside' survey, illustrated with a number of case studies . This substantive part of the research is informative and acknowledges frankly the many forces that restrict the effectiveness of anti-racist initiatives . It provides a salutary reminder of the pervasiveness of racism in local politics and as such is a welcome addition to the small body of literature looking at racism and the local state . However, drawing political lessons from their catalogue of frustrated efforts requires a political analysis . The one provided by The Local Politics of Race is seriously deficient . To begin with, as the title of the volume demonstrates, the authors do not regard the concept of `race' as problematic . The aim of their interventions in local politics, then, is to further the interests of `racial equality' . We are not told what these interests are, nor in what they might consist, but they are to be served through a more `direct and organic relationship' between research resources on the one hand and political practice on the other . Efforts to give this some meaning are hampered by the reference to racism as a ` . . . process the outcome of which is racial inequality' . This is tautological and unhelpful . The authors' statement of their own political position does not make this any clearer . They are members of the Labour Party and insist that ` . . . for us the struggle for socialism is part of a broader

Book Reviews struggle for the realisation of socialist principles' . Their desire to engage in `practical' politics and to distance themselves from sterile Marxist determinism results in a curious view of socialism, one that consists in basing socialism on a moral struggle to ensure a distribution of wealth which `penalises neither race nor class' and furthers the creation of `democratic institutional forms' . Capitalism as a mode of production, class antagonism, class struggle and class exploitation are absent from this vision of socialist transformation. This is more than merely a theoretical point ; it raises vital issues of political strategy . The authors' discussion of the 1976 Race Relations Act illustrates the point . According to them the Act can be used to some effect by anti-racists . Why, then, has it not been so used? Is it because there have been too few action researchers around to point out its radical potential or is it because it can be evaded? The limitations of the Act clearly derive from its relationship to the state as a state initiated reform . The limitations of, for example, minimum wage and health and safety legislation show that reforms cannot effectively challenge the power of the employing class . Struggles for `racial equality' that rely on such reforms will only succeed to the point where they challenge that power . This is not to say that such reforms are worthless, simply that no socialist strategy can be taken seriously that ignores or obscures the class barriers beyond which reforms become a challenge to capitalism . These difficulties are not eased by the constant references in the book to `struggle' . It is not made obvious what this struggle is about, whom it involves or on what terrain it is being conducted . It is like the concept `race' in this sense : apparently an objectively constituted category independent of historical relations, conditions and possibilities . `Race', `struggle',

`politics' here become reified categories 229 whose relationship to class interests and struggles is contingent . This makes it difficult to accept the claim of the authors that `For those committed to racial equality . . . the broad range of political interventions of the kind analysed in this book are their only viable option .' Why bother? must be the only answer to this on the evidence offered in The Local Politics of Race .

Working in Metal : Management and Labour in the Metal Industries of Europe and the USA, 1890-1914 Chris McGuffie Merlin Press, London, 302 pp . $17 .50 Reviewed by Mervyn Hartwig THIS IS A rare and delightful book - a thoroughgoing work of science which makes a number of significant contributions to the wider history of capitalist societies in the course of exposing, explaining and going beyond various entrenched ideological interpretations in its own specific field . McGuffie's central concern is to depict accurately and explain changes in the skill compositions and methods of training of the metal industry workforce in England, France, Germany and the USA, 1890-1914 . In an admirably controlled and sustained application of the comparative method, he

Capital & Class

230 finds that, while there were `real and substantial national differences', especially at the outset of industrialisation, they have been greatly misrepresented and exaggerated to the neglect of the fact that `what evolved to be held in common . . . has proved to be of far greater historical importance' (p . ix) . In each of the four countries there was a growing and irreversible intensification of labour and professionalisation of supervision and management . While labour became more differentiated technically, socially the faculties of mental and manual labour became increasingly polarised around the contrary interests of employers and workers . The national systems of industrial training which developed, however different in form - although even here there was a tendency to convergence - were fundamentally similar in content and aims and had a common outcome . They added a new public dimension to the private regulation of skill which mobilised the classes and sections of classes into socially exclusive training institutions . This increasingly locked the vast majority of workers as a class into specialised tasks and positions within the plant, blocking both upward and inter-plant mobility, as access to scientific knowledge of production and to managerial, supervisory and higher technical positions was restricted to a new class of externally trained and recruited petit bourgeois `professionals' . The new training systems thus not only serviced the technical needs of industry but underwrote the formation and composition of classes within it . These changes are to be understood neither, as some Marxists have tended to understand them, as decomposition and 'de-skilling' or `degrading' (with the alleged result that the working class became increasingly homogeneous and potentially united) nor, in neo-Taylorist

fashion, as recomposition and 're-skilling' or `upgrading' (with the alleged result that it became more heterogeneous and disunited) . Both approaches are one-sided and undialectical . They fail to appreciate that labour has a two-fold character as an activity engaged in material production and as an activity which produces and reproduces social classes . They assume that it is a mere `technical lump' which is decomposed and recomposed in unilinear fashion rather than `a complex power' and that its social forms can be read off directly from its technical attributes . Once the duality of labour is grasped - and contemporary observers grasped it far better than most subsequent historians and sociologists - it can be seen that skills and training progressively became both more technically differentiated as they were `at once enriched and impoverished, transformed and diluted, abolished and newly created' (p . 263) and socially more polarised around the professional qualification of management and the dequalification of proletarian labour . Hierarchies of skills developed both within managerial 'technical intelligence' (Sohn-Rethel's concept) and within manual labour (i .e . labour engaged in direct production), where a new stratum of highly qualified workers was called into being to maintain, design and set machinery . Managerial technical intelligence by no means became an exclusively mental activity, and manual labour was far from being completely degraded to an homogeneous class of automatons . But there can be no doubt that for the great mass of workers the quality of skills and training underwent `relative and absolute division and degradation' (p . 90) . Neo-Taylorists claim that the new specialised competences constituted `substantial' and `genuine' skills which compensated for the loss of old ones, but this `is nothing less than the

Book Reviews

commodity talking, dressed in Madison Avenue garb, and proclaiming its "substantial" and "genuine" differences from the other brands of soap detergents or lemonades' (p . 93) . It is a view which rests entirely upon the increase in the quantity of technical specialities without recognising that this was the condition for dispossessing the mass of workers from the realm of scientific and technical knowledge . While the Marxist tradition has by and large been unable to do justice to the technical differentiation of skills, it has at least grasped the historical significance of the social dimension and provides the basis for an adequate explanation of the overall processes of change . Since they were basically similar in four different countries the changes manifestly were the outcome of similar causal mechanisms . These are to be located, not (in Weberian or neo-Taylorist fashion) in a general technological imperative of efficient production in modern large-scale industry, but rather in the historically specific requirements of efficient production within specifically capitalist social relations of production during the first phase of transition to more monopolistic forms of capital : in the real subordination of labour to capital necessitated by the tendency of the average rate of profit to decline as the organic composition of capital rose . In each of the four countries a period of massive investment in fixed capital, which witnessed a shift in its composition away from infrastructure towards producer goods, followed by a slump, necessitated intensified use of plant and equipment for the maintenance of profitability over the long term : `As employers became aware of the economic consequences of their huge investment in plant and machinery, they sought to shift the emphasis of their

231 training methods . . . to . . . ensure a greater centralisation of managerial power, a more intensive use of fixed capital and an optimal maintenance of machinery . As a result, various public training schemes were developed to complement the private regulation of training, particularly for management engineers, technical and supervisory personnel, and hyper-qualified skilled workers . . . As the needs of enterprises changed, as the workforce became concentrated into larger plants and as profitable output came to depend on intensive use of machinery, public apparatuses of professional training had to be fashioned for the labour of supervision, management and the maintenance of machinery' (p . 264) . There was no general technological imperative at work here . On the contrary, the changes were `a product of machinery being stamped with the character of fixed capital and having to pay a dividend' (p . 91) : both the social polarisation of intellectual and manual labour and the economics of fixed capital investment which impelled it were specifically bourgeois in character; and it was they which shaped the technical needs of industry and the patterns of labour and training . McGuffie's demonstration that there was a strong tendency for the different national experiences to converge enables him to deal a hefty blow to a cluster of myths centring on the notion of the `peculiarities' of national capitalist development, in particular the notion that the decline of Britain and France relative to Germany and America is to be accounted for in terms of the regressive social values of their ruling classes who failed to appreciate the needs of the economy and so neglected to recompose skills in a progressive manner and to develop adequate

Capital & Class

232 systems of scientific and industrial training . The alleged relative backwardness in these matters of Britain in particular is often also related to the supposed availability of a workforce highly trained in craft skills . But the notion that such a workforce existed anywhere in the advanced capitalist world at the end of the nineteenth century is another myth which in this case rests on a confusion of `craft' with `skill' and of the technical division of labour under capitalism with that of artisanal production which preceded it . The business of regulating the skills of the workforce in a capitalist manner had been set in train with remarkable success right from the outset of capitalist industrialisation (i .e . in the era of `manufacture' and not just with the advent of mechanised production), so that by the late nineteenth century the role and influence of the craftsman in the overall structure of work was `at best negligible or, at worst, completely subordinated to the capitalist regulation of skill' (p . xii) . The argument of this wise and fascinating book on these and other matters is of course far more complex than can be indicated here . Besides being theoretically and methodologically sophisticated (though, refreshingly, this is not paraded), it reveals an impressive command of the relevant scholarly literature and empirical data . McGuffie knows the engineering industry so well that you seem to smell the workshops in his pages, and he is nothing if not thorough - the discussion of `the craft question', for example, sets out from the Middle Ages, and properly so . And he is thorough because he cares . His explanations will doubtless be deemed objectionably 'functionalist' or `teleological' in some quarters, though hardly with justice . He certainly seems to believe that the state and capital - unless prevented - will do whatever seems necessary to ensure profit-

ability (and behold, they do!) and that the general tendency of capitalist development thus `offers only subjugation or revolt' (p . 255) . But such a position by no means commits him or anyone else to explaining things in terms of their effects, or of farseeing conspiracies, merely to the view that capitalists and state personnel are by and large intelligent enough to perceive what has to be done within the `logic' of a situation to achieve a goal which after all is indispensable to their very existence or to that of the system they are trying to run, and that they therefore try to do it. There can be no substitute for reading Working in Metal, and those who do, in particular protagonists of a gamut of current debates - over `the peculiarities of the English' and the peculiarities of the Germans, over a variety of central issues within labour history, business history, the history of education, and the comparative history of industrialisation, over the status of the materialist primacy thesis (consistently applied and vindicated in this work), and others - will find a great deal to reward them . All will surely want to hold its author to his promise of a further volume on the era of Fordism .

Book Reviews

Ireland : Nation, State and Class Struggle Ronnie Munck

Westview Special Studies in West European Politics and Society . Boulder and London, 1985 Reviewed by Paul Bew RONNIE MUNCK is an Argentinian sociologist living and teaching in Belfast, whose previous works, notably Politics and

Dependency in the Third World: The Case of Latin America (1984), have not been con-

cerned with Ireland . Latterly, however, he has turned his scholarly attention to the evolution of the Ulster crisis, and the book reviewed here will be followed by an oral history of Belfast in the 1930s (co-authored with B . Rolston) . This book originally started life as an introduction in Spanish to the Irish question but is now usefully published in English . Essentially, it is a radical social-republican account of modern Irish history, broadly sympathetic to left-wing nationalism from Connolly to the present day . The author sympathises with Eamon McCann who is presented (slightly oddly as `admitting'?) that `there is no such thing as an anti-imperialist who does not support the Provos and no such thing as a socialist who is not antiimperialist' . The view of Irish history on which this formulation is based has been subjected to a sustained critique in recent years by a number of writers on the Irish left . The usual `anti-imperialist' method has been to ignore these arguments in favour of an exaltation of `practice' despite or perhaps because of, the degeneration of that practice into the different forms of sectarianism between the two main religious communities in Ireland . It is to Munck's credit in this serious and honest study that he does not take such an easy way out . Throughout much of the book he grapples with the

revisionist critique : the difficulty is that 233 this critique is perhaps rather more measured and sombre than he appears to appreciate . In criticising the progressive pretentions of Irish nationalism (heavily battered now by the ill-fated divorce referendum in the Irish Republic) it does not resurrect a counter-stereotype, that of `progressive Unionism' . On page 40, for example, Ronnie Munck refers to an observation in P . Bew, P . Gibbon and H . Patterson, The State in Northern Ireland (1979) where the authors speaking of events (the shipyard pogrom) in Belfast in 1920 say `the unionist leadership had been obliged to concede a portion of bourgeois power to the Orange section of the working class' . Munck writes : `This seems a rather flimsy basis on which to see anything progressive or "populist" about the northern state' . In fact, The State in Northern Ireland explicitly argues that the `politics and ideology of the Protestant masses were stripped of their progressive elements' in the 1905-13 period . As Bob Purdie (Fortnight, 2-15 June 1986) notes : 'Munck has mistaken a description of the complex process whereby loyalist workers were united in a political alliance with their Unionist masters for approval of that alliance' . There are a number of irritating slips which reduce the book's credibility . Most obviously a figure called `James Stewart Parnell' who appears from time to time as a major leader of constitutional Irish nationalism . Even more amazingly this character is described as `petty bourgeois' (p . 101) which he most certainly was not . To compensate, however, there is an excellent discussion (pp . 122/3) of the growing social conservatism 1918-20 particularly expressed in hostility to land seizures - of An t-Oglach, the IRA newspaper . This, unlike the bulk of the book, is based on original sources . Readers

Capital & Class

234 should be warned though that the references are heavily biased towards different variants of left historiography ; much of the mainstream work in Irish history goes unnoticed thus giving a slightly unreal air to some of the discussions . Overall, however, the book is a genuine attempt to come to terms with a complex problem . Whether it quite succeeds is another matter . However, anyone who desires to read an introductory history of Ireland from a republican point of view is well advised to start here ; it is the best of the versions currently on the market .

Nicos Poulantzas : Marxist Theory and Political Strategy Bob Jessop

Macmillan, London . 391 pp . £8 .95 p/b Reviewed by John Solomos BY THE TIME Nicos Poulantzas took his own life in late 1979 the reception of his work was already beginning to turn full circle . From a position where it was fashionable to use a `Poulantzian framework' to study this or that aspect of the state or class formation, it was by then becoming common to see his work being dismissed or at least forcefully criticised . His death meant that he was unable to

respond to much of this criticism, or to develop the complex argument he had articulated in his last book on State, Power, Socialism (1978) . Bob Jessop has therefore provided us with a useful opportunity to reassess the main feature of Poulantzas's contribution to Marxism . Written in the clear analytical and theoretically astute style that one has come to associate with Jessop's writing, this is a work of constructive and original criticism which is all too rare in the contemporary marxist tradition . The author has had the clear advantage of the full cooperation of Poulantzas's family, colleagues and some of his main critics, and access to his academic and journalistic articles . This makes for a study which is both analytically clear, and rich in detail about the various stages of the intellectual and political development of its subject . The essence of Jessop's analytic framework is outlined in Chapter 1, where he argues that the three distinctive sources of Poulantzas's intellectual development were French Philosophy, Italian Marxism, and Roman-German Law . Beginning with a brief, but important, chapter on his early legal studies, this volume then moves on to provide a detailed account and criticism of his theories of the state, his analysis of social classes and class struggle, and his discussion of the question of political strategy . It then concludes with two chapters on the originality of Poulantzas's work and the problems which he left unresolved . Each chapter includes a thorough review of the main arguments developed by Poulantzas, as well as some trenchant critical comments which articulate Jessop's own position on state theory and politics . It makes sense therefore to read this volume along with Jessop's previously published The Capitalist State (Martin Robertson, 1982) . As Jessop himself recognises there are

Book Reviews

numerous other theoretical sources which had some impact on the trajectory of Poulantzas's work, apart from the `three sources' which he outlines . But there is much of value in his suggestion that far from being a simple 'structuralist' approach to the state, the distinctiveness of Poulantzas's work derived from the creative tensions which resulted from his attempt to combine and rework his three sources . While most English readers have long been aware of the Althusserian influence on Poulantzas's state theory, the complex linkages with Sartre, German legal theory and Italian Marxism are shown to be crucial to his intellectual development. Towards the end of his life the work of Foucault also became a major source of criticism and debate . By questioning the applicability of a simple 'structuralist' label Jessop's study goes against much of the received wisdom and common sense orthodoxy which has developed over the last few yers . In fact, on almost every aspect of Poulantzas's work this volume avoids simplification and stands out against the received wisdom of both critics and supporters . Good examples of this approach are the chapters on `Social Classes and Class Alliances' (Chapter 6) and `Fascism and Dictatorship' (Chapter 8) . More generally those who have seen Poulantzas as 'theoreticist' will be surprised to see so much emphasis throughout on the political context of his work and his intimate political involvement with both Greece and France . If nothing else, this volume should help to develop a healthy critical interest in Poulantzas's work for those who have dismissed it, abandoned it for a more recent fashion, and the growing number who have never read him . Jessop's trenchant but friendly, and informed, criticisms should help to open up some new areas of debate and analysis . By doing

this, this volume will have helped in the 235 development of a more critical Marxist state theory and a more open debate about political strategies . In this sense this book is a must even for those who have long ceased to read Poulantzas, and should be read as widely as possible by all those interested in `Marxist Theory and Political Strategy' .

Capitalism and Apartheid Merle Lipton

Gower/Maurice Temple Smith, 1985 . Reviewed by Sammy Adelman and Bob Fine THE RELATIONSHIP between capitalism and apartheid is one which has stimulated much academic debate - inside South Africa and out . It is certainly one which has preoccupied liberal academics, who have consistently argued that apartheid is irrational and will disappear as the imperatives of capitalist accumulation assert themselves and the rule of the market holds sway . Merle Lipton is a liberal who has taken on Marxist writers on South Africa on their own ground, often using terminology usually associated with Marxist analyses, but who has failed to answer many of the central claims of the so-called neo-Marxist school .

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236

It should be noted at the outset that Lipton's book is comprehensive in tracing the history of South Africa under capitalism, it is well researched, and the tables at the end of the book are useful to anyone doing work in this field . The problems inherent in her analysis are, however, just as notable . They begin on the second page of the book, where apartheid, we are told, `is the system of legalised and institutionalised race discrimination and segregation in South Africa' . This is a workable definition, but it fails to confront the viable and generally accepted neo-Marxist argument to the effect that apartheid is not just a form of racial discrimination ; it is also a system of political economy and, more importantly, it is a capitalist political economy . This means that any analysis which separates apartheid and capitalism rather than defining race and class in relation to each other will experience problems of analysis from the start . As is all too often the case with liberal analyses, Lipton's is not an analysis of the contradictory nature of capitalist accumulation in the particular context of South Africa so much as a history of (mainly white) political interest groups . This is in itself ironic, for while Lipton rejects the neo-Marxist arguments in her conclusion, she nonetheless replicates aspects of their analyses - as well as their theoretical defects . Foremost among these has been the tendency to attach far too much importance to political events such as elections, and treating these as if they explained rather than reflected changing class interests and alliances . As apartheid finds itself in (terminal?) crisis in the 1980s it is apparent that problems of accumulation - to which apartheid was a response in the first place - are at the root of the crisis, and that these have three primary sources . First there are the structural imbalances inherent in the economy

resulting from the particular course of capitalist development in South Africa and the country's position in the world economy . Second, there are the problems generated by the contradictions of apartheid and its predecessor, `segregation' . It is here that Lipton's analysis might have been most powerful, in showing that there is some validity to the traditional liberal argument, and that reform is taking place to some extent because of the political and ideological constraints placed upon capitalist development by apartheid . Finally, apartheid is in crisis because of the intensification of organised black resistance, particularly amongst black workers . Lipton hardly addresses this issue, and it is a major defect in a book which discusses capitalism and apartheid primarily from the perspective of state and capital instead of focussing on the primary contradiction of capitalism, that between capital and labour . She concludes (p .365) that `apartheid cannot simply be explained as the outcome of capitalism or of racism . Its origins lie in a complex interaction between class interests (of white labour as well as sections of capital) and racism/ethnicity, reinforced by ideological and security factors' . This is obviously a far cry from the description of apartheid as `racial capitalism' favoured by some Marxist writers . Moreover, it creates the entirely misleading impression that apartheid is the result of white working-class resistance and intra-class conflicts in the dominant class only . Lipton is strongest when she challenges the functionalist framework within which much of the neo-Marxist tradition has posed the relationship between apartheid and capitalism . She reveals analytically what the growing crisis of capitalism in South Africa has shown historically, that the emergence of apartheid cannot be explained just in terms of its rationality as

Book Reviews

a means of controlling and exploiting cheap labour . This view was nourished by the success of South African capitalism in the 1960s and the collapse of the mass movement in that period, but failed to see beneath the surface the tensions - which came to light later - between the `needs' of capital and the lunacies of the apartheid regime . Instead, however, of developing a class analysis of apartheid in a more dynamic and genetic way, she tends to retreat to the liberal conception of the incompatibility of a free market economy and forced labour which the neo-Marxist school has already combatted . Lipton argues that `when self-interest is enlightened, that is leads to morally desirable actions (reducing discrimination or inequality), then it should be encouraged not only because of its positive effects but also because the element of self-interest is likely to make "good" behaviour more durable' (p . 372) . This essentially liberal viewpoint masks the fact that liberal capitalists in South Africa may always have voiced misgivings about apartheid, but they collaborated in its implementation in practice, particularly during the 1960s boom . In addition, it simply fails to confront the fact that it was during the 1960s, when the `pie' was getting bigger and should, according to the liberal thesis, have led to an attenuation of discrimination that apartheid was actually being intensified . In her conclusion, Lipton offers her reformulation of the 'race-class' debate in South African historiography, arguing that it is easier to forge alliances on ethnic rather than class lines (thus falling into the 'politicist' trap once again), but that ethnicity is not a sufficient basis for political alliances . She then states that class interests are also important but insufficient to explain the particular policies and alliances forged under or in relation to apartheid . The

result is confusing, and does not take the 237 debate much further . It is also strange that the nationalist struggle of the African National Congress and the trade union struggles of black workers are given so little attention . If, as Lipton states, `few scholars would argue that SA's virulent racism is unique . . . rather it is an extreme case of a world-wide phenomenon, generated by a peculiar combination of historical and structural features', then we have not progressed very far in understanding either apartheid or capitalism, and certainly not apartheid as a particular incarnation of capitalism with racism at its heart . We might as well consign Nazism to the heap as an `extreme case of a world-wide phenomenon' .



Capital & Class

Index

• of CC nos 1-29 . • CSE bulletin articles index to be found in CC no . 10 . • (BNS) - Behind the News . • (RA) - Review Article .

ADELMAN, Sammie . (BNS) Recent events in South Africa . CC26 Summer '85 . ALBRITTON, Robert R . The dialectic of capital : a Japanese contribution . CC22 Spring '84 . ALLEN, Mike & Paul Thompson . (BNS) Labour and the local state in Liverpool . CC29 Summer'86 . ALLUM, Cliff & Jo Quigley . (BNS) Bricks in the wall : the youth training scheme . CC21 Winter '83 . ANDREFF, Vladimir . The international centralisation of capital and the reordering of world capitalism . CC22 Spring '84 . ANTHIAS, Floya . Women and the reserve army of labour : A critique of Veronica Beechey . CC10 Spring'80 . ARMSTRONG, Philip. In defence of value A reply to Ian Steedman . CC5 Summer '78 . 238 ATKINS, Fiona . Thatcherism, populist authoritarianism and the search for a new left political strategy . CC28 Spring '86 . AUMEERUDDY, Aboot . Labour power and the state . CC6 Autumn '78 . BAKER, John . Debate : Trade union internationalism and the supranational state .

CC5 Summer'78 . BALDRY, Chris, Nigel Haworth, Simon Henderson & Harvey Ramsay . Fighting multinational power : an afternote on trade union research in Scotland . CC21 Winter'83 . BALL, Michael. British housing policy and the house building industry . CC4 Spring'78 . BALL, Michael, Doreen Massey & John Taylor . (RA) Marx's Capital and capitalism today . CC7 Spring'79 . BALL, Michael. Housing provisions and the economic crisis . CC17 Summer '82 . BALL, Michael . Coming to terms with owner occupation . CC24 Winter'85 . BANAJI, Jairus . Modes of production in a materialist conception of history . CC3 Autumn '77 . BANIM, Maura & Cherrie Stubbs . Rethinking the terms of tenure : a feminist critique of Mike Ball . CC29 Summer'86 . BARKER, Colin . Debate: a note on the theory of capitalist state . CC4 Spring '78 . BARKER, Jane & Hazel Downing . Word processing and the transformation of the patriarchal relations of control in the office . CC10 Spring'80 . BARRETT, Michele & Mary McIntosh . The



Capital & Class

`Family Wage' : Some problems for socialists and feminists . CC I1 Summer '80 . BEECHEY, Veronica . Some notes on female wage labour in capitalist production . CC3 Autumn '77 . BELLOFIORE, Riccardo . Marx after Schumpeter . CC24 Winter'85 . BENN, Tony . Interview . CC17 Summer'82 . BEW, Paul . (BNS) Northern Ireland (II) . CC28 Spring'86 . BEYNON, Huw, Ray Hudson & David Sadler . Nationalised industry policies and the destruction of communities : some evidence from North East England . CC29 Summer'86 . BHUSHAN, Bharat . (BNS) The origins of rebellion in the Punjab . CC24 Winter'85 . BINNS, Peter . (RA) Law and Marxism . CC10 Spring '80 . BLACKBURN, Phil, Ken Green & Sonia Liff . Science and technology in restructuring . CC18 Winter '82 . BRADBY Barbara . (RA) The remystification of value . CC17 Summer'82 . BREWER A .A . On Amin's model of autocentric a ccumulation . C C 11 Summer '80 . BRIGHTON LABOUR PROCESS GROUP . The capitalist labour process . CC I Spring '78 . BRYAN, Richard . Monopoly in Marxist methods . CC26 Summer'85 . BRYCESON, Deborah Fahy . Use values, the law of value and the analysis of non-capitalist production . CC20 Summer'83 . BURNS, Rob & Wilfred Van der Wijl . Organisation debate : working class organisation and the importance of cultural struggle : a critique of James Wickham . CC10 Spring '80 . BYRNE, David . Just hang on a minute there : a rejection of Andre Gorz's `farewell to the working class' . CC24 Winter '85 . CARCHEDI, Guiglielmo . (RA) Two models of class analysis - a review of E .O . Wright : Classes . CC29 Summer'86 . CARPENTER, Mick . Left orthodoxy and the politics of health . C C 11 Summer '80 . CARTELIER, Lysiane . The state and wage labour . CC18 Winter'82 . CASEY, Fred . Archives : Beginning with the beginner . CC7 Spring'79 .

239 CASTLES, Stephen . (RA) The new international division of labour . CC7 Spring '79 . CLARKE, Simon . Marxism, Sociology and Poulantzas' theory of the state . CC2 Summer '77 . CLARKE, Simon . Capital, fractions of capital and the state : 'neo-marxist' analyses of the South African state . CC5 Summer'78 . CLARKE, Simon . (RA) The value of value : Rereading Capital . CC10 Spring'80 . CLERQ, Francine de, Bob Fine & Duncan Innes . Trade unions and the state in South Africa : The question of legality . C C 1 5 Autumn '81 . COAKLEY, Jerry . (RA) Hilferding : Finance capital . CC17 Summer'82 . COAKLEY, Jerry . The internationalisation of bank capital . CC23 Summer '84 . COCHRANE, Alan . (RA) What's in a strategy? The London Industrial Strategy and municipal socialism . CC28 Spring'86 . CORIOT, Benjamin . The restructuring of the assembly line : a new `economy' of time and control . C C 1 1 Summer '80 . CRESSEY, Peter & John Macdonald . Voting for Ford : industrial democracy and the control of labour . CC 11 Summer'80 . CSE SEX AND CLASS GROUP . Sex and class . CC16 Spring'82 . DE VROEY, Michel . On the obsolescence of the marxian theory of value : a critical review . CC17 Summer'82 . DOWNING, Hazel & Jane Barker . Word processing and the transformation of the patriarchal relations of control in the office . CC10 Spring'80 . DRIVER, Ciaron . (RA) Aglietta `A theory of capitalist regulation : The us experience' . CC 1 5 Autumn '81 . DRIVER, Ciaron . (RA) Morgan and Purdie, `Ireland : Divided nation, divided class' and Bew, Gibbon and Patterson, `The state in Northern Ireland 1921-1972' . CC14 Summer '81 DROUCOPOULOS, Vassilis . The Non American challenge : a report on the size and growth of the world's largest firms . C C 14 Summer '81 .

Capital & Class 240

DUNCAN, Mike . The information technology industry in 1981 . CC17 Summer '82 . DUNCAN, Simon & Mark Goodwin . The local state and local economic policy : political mobilisation or economic regeneration . CC27 Winter'85 . EATWELL, John . On the theoretical consistency of the theories of surplus values : a comment on Savran . CC10 Spring'80 . ELDRED, Michael & Marnie Hanlon . Reconstructing value form a nalysis . C C 1 3 Spring '81 . ELDRED, Michael . A reply to Gleicher . CC23 Summer '84 . ELGER, Tony . Valorisation and `deskilling' : A critique of Braverman . CC7 Spring '79. ELGER, Tony & Richard Hyman . Job controls, the employers' offensive and alternative s trategies . CC 1 5 Autumn '81 . ELSON, Diane . Which way `out of the ghetto'? CC9 Autumn '79 . ELSON, Diane . The Brandt Report : a program for survival? CC 16 Spring '82 . ERSKINE, Angus . (BNS) Fowler's foul plans . CC28 Spring'86 . EVANS, Trevor . Money makes the world go round . CC24 Winter'85 .

unionism in the public services . CC4 Spring '78 . FRYER, R .H . British trade unions and the cuts . CC8 Summer'79 . FAIRCLOUGH, Andy . Notes : Employment and trade unionism in the public services . CC4 Spring '78 . FREEMAN-MOIR, John, Hugh Lauder & Alan Scott . What is to be done with radical academic practice? CC29 Summer'86 . FRISVOLD, George & Kate Rubin . (BNS) Reagan's new economic agenda : the military and the market . CC26 Summer '85 .

GAMBLE, Andrew . (BNS) The 1982 budget . CC17 Summer'82 . GARRAHAN, Philip . (BNS) Nissan in the North East of England . CC27 Winter '85 . GEORGIOU, George . (RA) The political economy of military e xpenditure. C C 1 9 Spring '81 . GIBSON, Kathrine & Julie Graham . Situating migrants in theory : the case of Philipino migrant contract construction workers . CC29 Summer '86 . GLC ECONOMIC POLICY GROUP . Socialist GLC in capitalist Britain? CC 18 Winter'82 . GLEICHER, David . A historical approach to the question of abstract labour . CC21 Winter FANO, Daniele . The fiscal crisis of the state : '83 . Notes on the Italian case . CC7 Spring'79 . GLEICHER, David. Note : a rejoinder to Eldred . CC24 Winter'85 . FINE, Ben . (RA) Andrew Glyn and John Harrison, `The British economic disaster' . GLYN, Andrew . In defence of value - a reply to Ian Steedman . CC5 Summer'78 . CC13 Spring'81 . FINE, Ben . The future of British coal . CC23 GOLDSTEIN, Nance . The new training initiative : a great leap backward . CC23 Summer'84 . FINE, Bob . Struggles against discipline : The Summer'84 . theory and politics of Michael Foucault . CC9 GOODWIN, Mark & Simon Duncan . The Autumn '79 . local state and local economic policy : political FINE, Bob, Francine de Clerq & Duncan mobilisation or economic regeneration . CC27 Innes . Trade unions and the state in South Winter'85 . Africa : The question of legality . C C 15 Autumn GOUGH, James . Industrial policy and socialist '81 . strategy : restructuring and the unity of the FLYNN, Tosh . Local politics and local working class . CC29 Summer'86 . government . CC13 Spring'81 . GRAHAM, Julie & Katherine Gibson . FRIEDMAN, Andy . Responsible autonomy Situating migrants in theory : the case of versus direct control over the labour process . Philipino migrant contract construction workers . CC29 Summer'86 . CC1 Spring'77 . FRYER, Bob . Notes : Employment and trade GRAHL, John . Restructuring in West

Capital & Class European industry . CC19 Spring'83 . GREEN, Ken, Phil Blackburn & Sonia Liff . Science and technology in restructuring . CC18 Winter'82 . GROSSMAN, Henryk . Archives . Marx, classical economy and the problem of dynamics . Part 1 . CC2 Summer'77 . GROSSMAN, Henryk . Archives . Marx, classical economy and the problem of dynamics . Part 2 . CC3 Autumn '77 . GULALP, Haldun . Debate on capitalism and development : the theories of Samir Amin and Bill Warren . CC28 Spring'86 . HANLON, Marnie & Michael Eldred . Reconstructing value form analysis . CC 1 3 Spring '81 . HARGREAVES HEAP, Shaun . World profitability crisis in the 1970s : Some empirical evidence . CC12 Winter'80 . HARGREAVES HEAP, Shaun . Response . CC 14 Summer'81 . HARRIS, Lorelei . Industry, women and working class politics in the west of Ireland . CC19 Spring'83 . HARRISON, John . In defence of value-A reply to Ian Steedman . CC5 Summer'78 . HARRISON, John & Bob Morgan . Hattersley's economics . CC26 Summer '85 . HARRISON, Mark. Survey . The Soviet economy in the 1920s and 1930s . CC5 Summer '78 . HARTMAN, Heidi I . The unhappy marriage of Marxism and Feminism : Towards a more progressive union . CC8 Summer'79 . HAWORTH, Nigel, Chris Baldry, Simon Henderson & Harvey Ramsay . Fighting multinational power : an afternote on trade union research in Scotland . CC21 Winter '83 . HEMSON, David . Trade unionism and the struggle for liberation in South Africa . CC6 Autumn'78 . HENDERSON, Simon, Chris Baldry, Nigel Haworth & Harvey Ramsay . Fighting multinational power : an afternote on trade union research in Scotland . CC21 Winter'83 . HIMMELWEIT, Susan & Simon Mohun . The anomalies of capital . CC6 Autumn '78 . HIRATA, Helena & John Humphrey . Economic crisis and the sexual division of

241 labour : the case of Brazil . CC24 Winter '85 . HODGSON, Geoff. Socialist economic strategy : a reply to Donald Swartz . CC16 Spring '82 . HOLLOWAY, John & Sol Picciotto . Capital, crisis and the state . CC2 Summer'77 . HORTON, Stephan . The `Revolution of hope' and its results . CC4 Spring'78 . HUDSON, Ray, Huw Beynon & David Sadler . Nationalised industry policies and the destruction of communities : some evidence from North East England . CC29 Summer'86 . HUGHES, Patrick & Neil McCartney . (BNS) Cable technology . CC19 Spring'83 . HUMPHREY, John . Labour use and labour control in the Brazilian automobile industry . CC12 Winter'80 . HUMPHREY, John & Helena Hirata . Economic crisis and the sexual division of labour: the case of Brazil . CC24 Winter '85 . HUMPHRIES, Jane . The `emancipation' of women in the 1970s and 1980s : From the latent to the floating . CC20 Summer'83 . HYMAN, Richard . The politics of workplace trade unionism : recent tendencies and some problems for theory . CC8 Summer'79 . HYMAN, Richard & Tony Elger . Job controls, the employers' offensive and alternative strategies . C C 1 5 Autumn '81 . INNES, Duncan . Capitalism and gold . CC14 Summer '81 . INNES, Duncan, Bob Fine & Francine de Clerq . Trade unions and the state in South Africa : the question of legality . C C 15 Autumn '81 . ITCH, Makoto . The great world depression and Japanese capitalism . CC21 Winter'83 . IWC COMMITTEE OF ENQUIRY INTO THE MOTOR INDUSTRY . Document . A workers' enquiry into the motor industry . CC2 Summer '77 . JACOBSON, David, Ann Wickham & James Wickham . (RA) The new international division of labour . CC7 Spring '79 . JAMES, Winston . The decline and fall of Michael Manley : Jamaica 1972-80 . CC19 Spring '83 . JENKINS, Rhys . Divisions over the

Capital & Class 242 international division of labour . CC22 Spring '84 .

MACWILLIAM, Scott . International capital, indigenous accumulation and the state in Papua New Guines : the case of the KALUZYNSKA, Eve . Getting it right . CC18 Development Bank . CC29 Summer'86 . Winter ' 82 . MANITEA-TSAPATSARIS, Vasso. Crisis in KIYOSHI, Yamamoto . `Mass demonstration' Greek agriculture : Diagnosis and an alternative movements in Japan in the period of post war strategy . CC27 Winter'85 . crisis . CC12 Winter'80 . MANSON, Tom . Notes : Employment and LAUDER, Hugh, John Freeman-Moir & Alan trade unionism in the public services . CC4 Scott . What is to be done with radical academic Spring '78 . practice? CC29 Summer '86 . MANSON, Tom . Health policy and the cuts . LAUTIER, Bruno . Labour power and the CC7 Spring'79 . state . CC6 Autumn'78 . MANTEGNA, Guido & Maria Moraes . A LIFF, Sonia, Phil Blackburn & Ken Green . critique of Brazilian political economy . CC10 Science and technology in restructuring . CC18 Spring '80 . Winter '82 . MANWARING, Tony . Labour productivity LINDSEY, J.K . Comment on S .H . Heap : and the crisis at BSC : Behind the rhetoric . CC14 `World profitability crisis in the 1970s : some Summer'81 . empirical evidence' . CC14 Summer'81 . MARTIN, John . The conflict in Northern LIPIETZ, Alain . Imperialism or the beast of Ireland : Marxist interpretations . CC18 Winter the apocalypse . CC22 Spring '84 . '82 . LOCKSLEY, Gareth . Information technology MARX, Karl . Archive . The value-form . CC4 and capitalist development . CC27 Winter '85 . Spring '77 . LOJKINE, Jean . From the industrial MARGIRIER, Gilles . The Eighties : A second revolution to the computer revolution : first phase of the crisis? CC21 Autumn '83 . signs of a new combination of material and MASSEY, Doreen, Michael Ball & John human productive forms . CC29 Summer'86 . Taylor . (RA) Marx's Capital and capitalism LONDON CSE GROUP . Crisis, the labour today . CC7 Spring 79 . movement and the alternative economic MCCARTNEY, Neil & Patrick Hughes . strategy . CC8 Summer'79 . (BNS) Cable technology . CC19 Spring'83 . LOVELL, Terry . (RA) Why cultural studies MCDONNEL, Kevin . Ideology, crisis and the matter . CC16 Spring'82 . cuts . CC4 Spring'78 . LUMLEY, Bob . (RA) Working class MCEACHERN, D . Party government and the autonomy and the crisis : Italian marxist texts of class interest of capital : conflict over the steel the theory and practice of a class movement, industry . CC8 Summer'79 . 1964-1979 . CC12 Winter'80 . MCINTOSH, Mary & Michele Barrett . `The family wage' : Some problems for socialists and MACDONALD, John & Peter Cressey . feminists . CC11 Summer'80 . Voting for Ford : Industrial democracy and the MCLACHAN, H .V ., A .T . O'Donnell & J .K . control of l abour . C C 11 Summer '80 . Swales . On the logical consistency of Sraffa's MACDONALD, Oliver . (BNS) Poland's new economic theory . CC10 Spring'80 . working class m ovement . C C 1 3 Spring '81 . MILES, Robert . Labour migration, racism MACKENZIE, Donald . Notes on the science and capital accumulation in western Europe . and social relations debate . CC14 Summer'81 . CC28 Winter'85 . MACKENZIE, Donald . Militarism and MINNS, Richard . A comment on `finance socialist theory . CC19 Spring '83 . capital and the crisis in Britain' . CC14 Summer MACKINTOSH, Maureen . Reproduction '81 . and patriarchy : A critique of Meillassoux, MINNS, Richard . Pension funds - an `Femmes, Greniers et Capitaux' . CC2 Summer alternative view . CC20 Summer'83 . '77 . MITTER, Swasti . Industrial restructuring and



Capital & Class

manufacturing homework : Immigrant women in the UK clothing industry . CC27 Autumn'85 . MOHUN, Simon . (BNS) The transatlantic economic disaster. CC18 Winter'82 . MOHUN, Simon & Susan Himmelweit . The anomalies of capital . CC6 Autumn '76 . MORAES, Maria & Guido Mantegna . A critique of Brazilian political economy . CC10 Spring '80 . MORGAN, Bob & John Harrison . Hattersley's economics. CC26 Summer'85 . MUELLER, Suzanne . Barriers to the further development of capitalism in Tanzania : the case of t obacco . CC 1 5 Autumn '81 . MUNCK, Ronaldo . State and capital in dependent social formations : The Brazilian case . CC8 Summer '79 . MUNCK, Ronaldo. (BNS) Argentina . CC22 Winter'83 . MUNCK, Ronaldo. (BNS) Northern Ireland . CC28 Spring '86 . MUNCK, Ronaldo . Otto Bauer. Towards a Marxist theory of nationalism . CC25 Spring '85 . MURRAY, Fergus . The decentralisation of production : The decline of the mass-collective worker? CC19 Spring'83 . MURRAY, Robin . Pension funds and local authority investments . CC20 Summer'83 . MURRAY, Robin . Value and theory of rent : Part 1 . CC3 Autumn'77 . MURRAY, Robin . Value and theory of rent : Part 2 . CC4 Spring'78 . NAKASE, Toshikazu . Some characteristics of Japanese type multinational enterprises today . CC13 Spring'83 . NIMNI, Ephraim . The great historical failure : Marxist theories of nationalism . CC25 Spring '85 . O'DONNELL, A .T ., H .V . McLachan & J . K . Swales . On the logical consistency of Sraffa's economic theory . CC10 Spring'80 . O'DONNELL, Kathy . Brought to account . The NCB and the case for coal . CC26 Summer '85 . O'DOWD, Liam, Bill Rolston & Mike Tomlinson . From Labour to the Tories : The ideology of containment in Northern Ireland .

CC18 Winter'82 .

OLLE, Werner & Wolfgang Schoeller . Direct investment and monopoly theories of imperialism . CC16 Spring'82 . OLLE, Werner & Wolfgang Schoeller . World market competition and restrictions upon international trade union policies . CC2 Summer '77 . OVERBEEK, Hank . Finance capital and the crisis in Britain . CC 11 Summer'82 . OVERBEEK, Hank . (BNS) The Westland affair : collision over the future of British capitalism . CC29 Summer'86 . PANITCH, Leo . The state and the future of socialism . CC11 Summer'80 . PANNEKOEK, Anton . The theory of the collapse of capitalism . CCI Spring'77 . PANNEKOEK, Anton . On organisation (introduced by John Holloway) . CC9 Autumn '79 . PEARCE, Jenny . (BNS) El Salvador . CC1 Autumn '81 . PHILLIPS, Anne & Tim Putnam . Education for emancipation : The movement for independent working class education 1908-1928 . CC10 Spring'80 . PHILLIPS, Anne . (RA) Barrett, `Women's oppression today : Some problems in Marxist Feminist Analysis' . CC14 Summer '81 . PICCIOTTO, Sol & John Holloway . Capital crisis and the state . CC2 Summer'77 . PICCIOTTO, Sol . (BNS) The battle at TalbotPoissy : workers' divisions and capital restructuring . CC23 Summer'84 . PUTNAM, Tim & Anne Phillips . Education for emancipation : The movement for independent working class education 1908-1928 . CC10 Spring'80 . PUTNAM, Tim . (RA) Mode of production -out? CC4 Spring'78 . QUIGLEY, Jo & Cliff Allum . (BNS) Bricks in the wall : the youth training scheme . CC21 Winter '83 . RADICE, Hugo . A short history of the C SE. CC 10 Spring '80 . RADICE, Hugo . The national economy - a Keynesian myth? CC22 Spring '84 .

243

Capital & Class 244 RAINNIE, Al . Small firms, big problems : The political economy of small businesses . CC25 Spring'85 . RAINNIE, Al . Combined and uneven development in the clothing industry : the effects of competition on accumulation . CC22 Spring '84 . RODDICK, Jackie . Crisis, 'seignorage' and the modern world system : rising third world power or declining us hegemony? CC23 Summer'84 . RAKOVSKI, Mark . Marxism and Soviet societies . CC1 Spring'77 . RAMSAY, Harvey, Chris Baldry, Nigel Haworth & Simon Henderson . Fighting multinational power : Possibilities, limitations and contradictions . CC20 Summer '83 . RAMSEY, Harvey, Chris Baldry, Nigel Haworth & Simon Henderson . Fighting multinational power : an afternote on trade union research in Scotland . CC21 Winter '83 . REINFELDER, Monika & Phil Slater . (RA) Intellectual and manual labour : an introduction to Alfred Sohn-Rethel . CC6 Spring'78 . REVELLI, Marco . Defeat at Fiat . CC 16 Spring'82 . ROLSTON, Bill, Liam O'Dowd & Mike Tomlinson . From Labour to the Tories : The ideology of containment in Northern Ireland . CC18 Winter'82 . RUBEN, David Hillel . (RA) Response to Binns on `Marxism and Materialism' . CC12 Winter'80 . RUBIN, I . I . Archives : Abstract labour and value in Marx's system . CC5 Summer '78 . RUBIN, Kate & George Frisvold . (BNS) Reagan's new economic agenda : the military and the market . CC26 Summer'85 . RUDIG, Wolfgang . Capitalism and nuclear power - A reassessment . CC20 Summer'83 . RUGGIERO, Vincenzo . The encounter between big business and organised crime . CC26 Summer'85 . SARDONI, Claudio . The fiscal crisis of the state: notes on the Italian case . CC7 Spring'79 . SAVRAN, Sungur . On the theoretical consistency of Sraffa's economics . CC7 Spring '79 .

SAVRAN, Sungur . Debate : On confusions concerning Sraffa (and Marx) . CC12 Winter '80 . SAYER, Derek . (RA) A critique of Soviet Economics . CC8 Summer'78 . SCHIFFER, Jonathan . Debate : A brief note on Soviet economics . CC12 Winter'80 . SCHOELLER, Wolfgang & Werner Olle . Direct investment and monopoly theories of imperialism . CC16 Spring'82 . SCHOELLER, Wolfgang & Werner Olle . World market competition and restrictions upon international trade union policies . CC2 Summer'77 . SCHWARZ, Bill . (RA) Cooling the white heat . CC20 Summer'83 . SCHWARZ, Bill . (RA) `Conservatism and class struggle, politics in industrial society?' CC12 Winter'80 . SCOTT, Alan, Hugh Lauder & John Freeman-Moir . What is to be done with radical academic practice? CC29 Summer '86 . SEMMLER, Willi . Theories of competition and monopoly . CC 12 Winter'82 . SENDER, John & Sheila Smith . What's right with the Berg report and what's left of its critics . CC24 Winter'85 . SHORTALL, Felton C . Fixed and circulating capital . CC28 Spring'86 . SHUTT, John . Tory enterprise zones and the labour movement . CC23 Summer'84 . SIMM, Joe & Paul Gilroy . Law, order and the state of the left. CC25 Spring'85 . SKETCHLEY, Peter, Ray Bush & Lionel Cliffe . Steel : The South African connection . CC20 Summer'83 . SLATER, Phil & Monika Reinfelder . (RA) Intellectual and manual labour: an introduction to Alfred Sohn-Rethel . CC6 Spring '78 . SOLOMOS, John . Debate: The marxist theory of the state and the problems of fractions . CC7 Spring'79 . SMITH, Ron . Aspects of m ilitarism . CC 19 Spring '83 . SMITH, Sheila & John Sender . What's right with the Berg report and what's left of its critics? CC24 Winter'85 . SPENCE, Martin . Imperialism and decline : Britain in the 1980s . CC25 Spring'85 .



Capital & Class SPENCE, Martin . Nuclear capital . CC16 Spring '82 . SPENCE, Martin . Soviet power : Nuclear energy in the USSR . CC21 Winter '83 . STAFFORD, Anne . Learning not to labour . CC15 Autumn'81 . STEEDMAN, Ian . On an alleged inconsistency in Sraffa's economics . CC9 Autumn '79 . STUBBS, Cherrie & Maura Banim . Rethinking the terms of tenure : A feminist critique of Mike Ball . CC29 Summer'86 . SWALES, J .K ., H .V . MacLachan & A .T . O'Donnell . On the logical consistency of Sraffa's economic theory . CC10 Spring'80 . SWARTZ, Donald . The eclipse of politics : The alternative economic strategy as a socialist strategy . CC13 Spring'81 .

245 VAN DER WIJL, Wilfred & Rob Burns . Organisation debate : Working class organisation and the importance of cultural struggle : a critique of James Wickham . CC 1 0 Spring'80 . VILAS, Carlos M . Nicaragua : The fifth year transformations and tensions in the economy . CC28 Spring'86 . VROEY, Michel de . A regulation approach interpretation of the contemporary crisis . CC23 Summer'84 .

WAJCMAN, Judy . (RA) Working women . CC18 Winter'82 . WARRINGTON, Ronnie . Standing Pashukanis on his head . CC12 Winter'80 . WEEKS, John . Equilibrium, uneven development and the tendency of the rate of profit to fall . CC 16 Spring '82 . TAYLOR, John, Michael Ball & Doreen WHEELOCK, Jane . Competition in the Massey . (RA) Marx's Capital and capitalism marxist tradition . CC21 Winter'83 . today . CC7 Spring'79 . WHITBREAD, Chris . Gorz, Nove, Hodgson : TAYLOR, P . S . Labour time, work The economics of socialism . CC26 Summer measurement and the comensuration of labour . '85 . CC9 Autumn '79 . WHITFIELD, Dexter . (BNS) Coal : a TEAGUE, Paul . The alternative economic privatisation postponed? CC25 Spring '85 . strategy : a time to go European . CC26 Summer WICKHAM, Ann, David Jacobson & James '85 . Wickham . (RA) The new international THOMPSON, Paul & Mike Allen . (BNS) division of labour . CC7 Spring'79 . Labour and the local state in Liverpool . CC29 WICKHAM, James, David Jacobson & Ann Summer '86 . Wickham . (RA) The new international TISSIER, Patrick . The economic policy of the division of labour . CC7 Spring'79 . new Chinese leadership in 1977 and 1978 . CC9 WICKHAM, James. Social fascism and the Autumn '79 . division of the working class movement : TOMLINSON, E . Althusser, Balibar and Workers and political parties in the Frankfurt production . CC4 Spring'78 . area 1929/1930 . CC7 Spring'79 . TOMLINSON, Jim . British politics and WILLIAMS, Mike . The theory of (the) cooperatives . CC12 Winter'80 . capitalist state(s) . A reply to Colin Barker . CC9 TOMLINSON, Mike, Liam O'Dowd & Bill Autumn '79 . Rolston . From Labour to the Tories : The WILLIAMS, Mike . (RA) The London CSE ideology of containment in Northern Ireland . Group. `The AES : a labour movement response CC18 Winter'82 . to the economic crisis' . CC14 Summer'81 . TORTAJADA, R . Labour, power and the WILLIAMS, Mike . (RA) Bob Rowthorn, state . CC6 Autumn '78 . `Capitalism, conflict and inflation : essays in TORTAJADA, R . A note on the reduction of political economy' . CC12 Winter'80 . complex labour to simple labour . CC 1 Spring WILLOUGHBY, John . Internationalism and '77 . the development of an alternative economic strategy in the United States : A review essay on VAN DER PIJL, Kees . Class formation at the The Deindustrialisation of America and international level . CC9 Autumn '79 . Beyond the waste land . CC21 Winter'83 .

Capital & Class

246 YUVAL-DAVIS, Nira . (BNS) The current crisis in Israel . CC22 Spring '84 . YUVAL-DAVIS, Nira . Ethnic/racial divisions and the nation in Britain and Australia . CC28 Spring '86 .

BOOK REVIEWS (reviewer's name in brackets)

AMIN, Samir . Unequal development (Diane Elson) CC3 Autumn '77 . ANDERSON, Perry . Consideration of Western Marxism (Michael Barratt Brown) CC5 Summer'78 . ARRIGHI, G . The geometry of imperialism (Anne Phillips) CC9 Autumn'79 . BARRATT BROWN, Michael . Models in Political Economy (Francis Green) CC26 Summer'85 . BASSETT, Keith & John Short . Housing and residential structures : alternative approaches (Michael Ball) CC13 Spring '81 . BETTELHEIM, Charles . Class struggle in the USSR . First period: 1917-23 (John Taylor) CC3 Autumn'77 . BLEANEY, Michael . Underconsumption theories : A history and critical analysis (Ian

Steedman) CCI Spring'77 . BLOOMFIELD, Jon . Passive revolution : Politics and the Czechoslovakian working class 1945-1948 (Mark Harrison) CC12 Winter'80 . BOTTOMORE, Tom & Patrick Goode (eds) . Austromarxism (Dick Geary) CC9 Autumn '79 . BRANSON, Noreen, History of the Communist Party of Great Britain 1927-1941 (Rachel Sharp) CC27 Winter'85 . CAMERON, John, Ken Cole & Chris Edwards . Why Economists Disagree (Shaun Hargreaves Heap) CC26 Summer'85 . CARRIERE, Jan . Industry and the state in Latin America (Ronaldo Munck) CC 14 Summer '81 . CATALANO, Alejandrina & Doreen Massey . Capital and land (Michael Edwards & David Lovatt) CC9 Autumn'79 . CATEPHORES, George & Michio Morishima . Value, exploitation and growth (Sue Himmelweit) CC9 Autumn'79 . CDP INFORMATION UNIT . Profits against houses . Limits of the law . The costs of industrial change (Peter Taylor Goodby) CC3 Autumn'77 . CLARKE, John, Chas Critcher & Richard Johnson . Working class culture : Studies in history and theory (Howard Home) CC 14 Summer '81 . CLOWARD, Richard A . & Frances Fox Piven . Poor peoples' movements : Why they succeed and how they fail (Geoff Rayner) CC 11 Summer '80 . COCKBURN, Cynthia . The local state : The management of cities and people (Jennifer Dale) CC5 Summer '78 . COOPER, Eugene . The woodcarvers of Hongkong : Craft production in the world capitalist periphery (Colin Filer) CC 1 3 Summer'81 . CORRIGAN, Philip, Harvey Ramsay & Derek Sayer . Socialist construction and marxist theory : Bolshevism and its critique (Mark Harrison) CC8 Summer'79 . COWLEY, John . Housing for people or profits? (Michael Ball) CC13 Spring'81 . CROMPTON, Rosemary & Jon Gubbay . Economy and class structure (Allin Cottrell) CC9 Autumn '79 .

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247 materialism (Peter Binns) CC9 Autumn '79 . HIRD, Christopher. Challenging the Figures (Robert Bryer) CC28 Spring'86 . HODGSON, Geoff. The Democratic Economy (Francis Green) CC26 Summer'85 . HOLLAND, Stuart . Capital versus the regions . The regional problems (David Purdy) CC1 Spring'77 . JACOBS, Joe . Out of the ghetto : My youth in the East End, Communism and Fascism 19131939 (Norman Ginsburg) CC10 Spring'80 . JOWELL, Roger & Sharon Witherspoon . British Social Attitudes : the 1985 report (Andrew Gamble) CC28 Spring'86 . KAMENKA, K. & R .S . Neale (eds) . Feudalism, capitalism and beyond (Chris Scott) CC2 Summer'77 . KAY, Geoffrey . Development and under-development : A marxist analysis (John Humphrey) CC2 Summer'77 . KELLNER, Douglas (ed .) . Karl Korsch : Revolutionary theory (Phil Slater) CC6 Autumn '78 . KRADER, L . The asiatic mode of production (John Solomos) CC3 Autumn'77 . KULA, Witold . An economic theory of the feudal system - towards a model of the Polish economy, 1500-1800 (Chris Scott) CC2 Summer '77 . LAING, Dave. The marxist theory of art (Alan Lovell) CC8 Summer'79 . LEVINE, P .D . Economic studies: Contribution to the critique of economic theory . Economic theory, volume 1 (Geoff Hodgson) CC7 Spring'79 . LEWENHAWK, Sheila . Women and trade unions (Sally Alexander) CCI1 Summer'80 . LINDER, Marc . Anti-Samuelson (Francis Green) CC5 Summer'78 . LONDON EDINBURGH WEEKEND RETURN GROUP . In and against the state (Peter Fairbrother) CC 11 Summer '80 . LUCAS, Erhard . Arbetierradikalismus : Zwei formen von radikalismus in der deutschen arbeiterbewegung (James Wickham) CC 1 Spring'77 . LUKES, S . Marxism and Morality (Chris

248 Arthur) CC29 Summer'86 . MAGDOFF, Harry & Paul M . Sweezy . The end of prosperity : The American economy in the 1970s (Ben Fine) CC6 Autumn '78 . MASSEY, Doreen & Alejandrina Catalano . Capital and land (Michael Edwards and David Lovatt) CC9 Autumn '79 . MERRETT, Stephen . State housing in Britain (Michael Ball) CC13 Spring'81 . MINNS, Richard . Pension funds and British capitalism (Hugo Radice) CC16 Spring'82 . NAIRN, Tom . The break up of Britain (Ian Macwhirter) CC5 Summer'78 . NAVARRO, Vincente . Class struggle, the state and medicine : An historical and contemporary analysis of the medical sector in Great Britain (Michael Carpenter) CC8 Summer'79 . NAVARRO, Vincente . Medicine under capitalism (Mike Bury) CC5 Summer'78 . NORTH TYNESIDE CDP . North Shields : working class and housing, 1900-1977 ; North Shields : Living with industrial change ; North Shields : Organising for change in a working class area ; North Shields : Organising for change in a working class area - the action groups ; North Shields : Women's work (Norman Ginsburg) CC9 Autumn'79 . O'DOWD, Liam, Bill Rolston & Mike Tomlinson . Northern Ireland : Between civil rights and civil war (Richard Chessum) CC 16 Spring '82 . OFFE, Clause . Disorganised capitalism (John Urry) CC28 Spring'86 . PIRATIN, Phil . Our flag stays red (Norman Ginsburg) CC1O Spring'80 . POGGI, Gianfranco . The development of the modern state : A sociological introduction (John Holloway) CC9 Autumn'79 . PRETECEILLE, E . & J .P . Terrail . Capitalism, consumption and needs (M . Dunford) CC29 Summer'86 . REPORT of a committee chaired by J .C . Meade, Institute of Fiscal Studies . The structure and reform of direct taxation (Jim

Tomlinson) CC10 Spring'80 . RODOLSKY, Roman . The making of Marx's `Capital' (two reviews : Simon Clarke & Ben Fine) CC6 Autumn'78 . ROWBOTHAM, Sheila, Lynne Segal & Hilary Wainwright. Beyond the Fragments (Veronica Beechey) CC 10 Spring '82 . SAYER, Derek, Philip Corrigan & Harvey Ramsay . Socialist construction and marxist theory : Bolshevism and its critique (Mark Harrison) CC8 Summer'79 . SCHWARTZ, Jesse (ed .) . The subtle anatomy of capitalism (Simon Mohun) CC9 Autumn '79 . SEGAL, Lynne, Sheila Rowbotham & Hilary Wainwright . Beyond the Fragments (Veronica Beechey) CCIO Spring'82 . SHORT, John & Keith Bassett . Housing and residential structures : Alternative approaches (Michael Ball) CC 13 Spring'81 . SMART, D .A . (ed .) . Pannekoek and Goner's marxism (John Holloway) CC7 Spring'79 . SOHN-RETHEL, Alfred . Economy and class structure of German fascism (Claudia von Braunmuhe) CC I I Summer'82 . SOLDEN, Norbert C . Women in British trade unions : 1874-1976 (Sally Alexander) CCI I Summer '80 . S WEEZY, Paul M . & Harry Magdoff. The end of prosperity : The American economy in the 1970s (Ben Fine) CC6 Autumn'78 . TAYLOR, Roger L . Art, an enemy of the people (Alan Lovell) CC8 Summer'79 . THANE, Pat (ed . ) . The origin of British social policy (Norman Ginsburg) CC7 Spring'79 . THERBORN, Goran . Science, class and society (Simon Clarke) CC2 Summer'77 . TOIT, Bettie du . Ukabamba Amadolo (David Hemson) CC9 Autumn '79 . TROYNA, B . & J . Williams . Racism, Education and the State (Rachel Sharp) CC29 Summer '86 . VILAR, Pierre . A history of gold and money, 1450-1920 (Barbara Bradby) CC3 Autumn'77 . VOGLER, Carolyn M . The Nation State (Sol Picciotto) CC28 Spring'86 . VYLDER, Stefan de . Chile 1970-73 . The

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