From International Socialism (1st series), No.27, Winter 1966/67, pp.32-33.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
Marxist discussions of trade unionism are notoriously thin on the ground, and V.L. Allen’s latest book  is therefore especially welcome. Subtitled A Re-Analysis of Industrial Action in an Inflationary Situation, the book is an examination of the nature and purposes of trade unionism in capitalist society, particularly in relation to current controversies over ‘incomes policy.’ It is a serious and constantly provoking work, and deserves a wide readership.
The bones of Allen’s argument are that in a capitalist society, defined in terms of private ownership of the means of production and a free market in labour, trade unionism can only be understood as a natural organisational response by employees to a basically unequal market relationship between the buyers and sellers of labour power. This is evidenced in the continuing spread of trade unionism to ‘white collar’ sections of the working class.
The degree of ‘militancy’ displayed, its forms and purposes, are a function of, firstly, primary economic determinants (state of labour market, fortunes of particular industries, etc) and, secondly, secondary ‘socialising influences’ (here this reviewer would have liked a more extended discussion of ideology): in other words, the objective situations facing groups of workers, and their own interpretations of and activities in these situations. In the British context, Allen points to the powerful and continuing belief in Parliamentary democracy, the over-emphasis on the sanctity of centralised bargaining and the rustiness of national trade-union organisations as the prime factors tending to depress militancy and contain it within ‘responsible’ limits. These ‘responsible’ limits are defined by the ruling class and particularly by its emphasis on the maintenance of the pound sterling. Defence of the pound and the ‘national interest’ are, he suggests, in practice treated as synonymous. Continual pressures on sterling have time and again led Governments to turn their attentions to weakening trade unionism. This approach has rested on an analysis of British economic problems that stressed trade-union responsibility for recurrent crises. There is a clear continuity between the earlier, purely monetary, responses to crisis and the ‘prices and incomes policy.’ The second part of the book examines the conventional framework, the ruling class ideology, within whose terms policy decisions are made, with respect to ‘industrial harmony’ and the causes of inflation in particular. This is the most interesting and valuable section of the book. Allen examines the conventional explanations of strikes (as due to ‘troublemakers’ and/or ‘bad communications’) and exposes their ideological core. He points to the structural basis of strike action, in the capitalist employer-employee relationship. At the centre of this relationship, he suggests, is a basic structural conflict over ‘distribution,’ a conflict between the unequal partners to the core relationship of capitalist society. ‘Class conflict is the norm in a capitalist society and must be a given factor in any analysis of industrial behaviour’ (p.114). The essentially bourgeois assumption of a ‘harmony of interests’ in industrial relations is fallacious. Ironically, all the means currently proposed for ensuring ‘harmony’ involve the use of sanctions of one sort or another against workers.
For the present reviewer, the most interesting chapter of Allen’s book is that dealing with incomes policy and inflation. He points out that the capitalist desire to maintain stable prices – in part a function of ‘equilibrium theory’ – is regularly imposed as a burden on the wage-earners:
‘The cost of Britain’s international banking reputation is borne internally, largely by wage-earners, for it is on these that the burden of achieving stable prices inevitably falls.’
But how great is union responsibility for inflation? The whole emphasis in orthodox economic theory is on the means by which the inflationary process is maintained, not on the causes of inflation. These are, however, structural features of modern monopolistic capitalism, not directly the product of the class struggle in the factories. Firstly, import prices are of crucial importance, yet they enter the system from outside. Secondly, the growing concentration of capital creates monopolistic organisations whose effects on price structure are commonly ignored. Thirdly, there is excess demand, generated not so much by the level of incomes relative to employment, production and investment (as in orthodox analysis) as by the volume of incomes. In other words, ‘additional incomes as well as additions to incomes’ must be examined in any attempt to account for inflation. Four types of inflationary employment of labour are relevant, all of them originating in the pressures created by contemporary capitalism.
First, there are incomes created through arms expenditure; second, labour hoarded in excess of productive requirements; third, excessive employment in selling and distribution, a product of the tendency to greater concentration and of the problems of marketing in an oligopolistic situation in which price-cutting is too dangerous; and, fourth, the enormous growth of administrative functions, far beyond the simple technical requirements of contemporary technology. Here, as in the discussion of industrial conflict, Allen points firmly to the structural bases of inflation. His analysis of the roots of inflation connects with the analyses by Cliff, Kidron and others of the ‘permanent arms economy.’  Where they begin with the capital side, and seek to explain the absence of crisis and the permanence of full employment, Allen begins with wages and inflation, but arrives at the same conclusion:
‘The economically non-productive workers are absorbing a relatively high proportion of the products of industry and in this way their existence covers up the problem of excess production. If they were transferred to economically productive activities, aggregate output would increase, the prime pressure on prices would disappear and the real issue facing capitalism would be uncovered.’ (p.147)
In line with the whole analysis, Allen concludes that the correct policy for trade unionists begins with a recognition that no policy involving wage control can seriously diminish inflation, whose causes are structurally inherent in modern capitalism. Analysis and policy must rest on a class basis. In short, unions must pursue a ‘high wages’ policy, that accepts playing the market to its limits, accepts decentralised bargaining, and rejects conventional thinking about British capitalism’s economic problems.
Space does not permit a longer and probably more just account of Allen’s central argument. Essentially, his book is an attempt to set up a fruitful model in terms of which the situation and problems of unions in Britain may be analysed. The book is a fresh look, within a Marxist perspective, at some of the core institutions of capitalist Britain.
Of necessity, a large part of the book is relatively abstract in its approach; and my criticisms of it amount largely to a wish that the book were longer, so that Allen could have moved from the abstract to a closer, more historical account of present developments. In particular, an analysis of the trade-union movement since the war, and of the sources of opposition to existing policies and so on, would have been invaluable. For while the case for opposition to current TUC policy is excellently argued, the actual movement of opposition (potential and actual) is not assessed. This is a pity, since an examination of this kind might have further enriched and developed the general model Allen presents. Also, Allen’s advocacy of ‘militancy’ might have been made more specific. The urgent need is not simply for general advocacy of militancy, but for identification and encouragement of the likely militants, those whose present situations and activities seem to make them the most likely leading subjects of the class struggle.
In Allen’s model, the central area of conflict in the employment relationship is the conflict over distribution of the product. The lack of equity in distribution is seen as the prime root of class conflict. Yet, if we examine the (admittedly unsatisfactory) national strike statistics, one thing that stands out from them is the remarkable shift in issues over which strikes have taken place since the war. ‘Non-wage’ issues now seem to be more important than ‘wage’ issues. In other words, not only is there structural conflict over distribution, but at the point of production itself the employment relationship is inherently conflictual. This is the point at which, to use Marx’s terminology, labour power is transformed into labour in the process of production. As a number of recent studies (most notably, W. Baldamus’ Efficiency and Effort) have demonstrated, the ‘realisation’ of labour power is a process in which conflict is endemic. Thus the class struggle does not simply amount to struggle for a more equitable system of distribution, but centrally involves questions of control over the means of production and their use.
This of course has implications for the general analysis of capitalism as a productive system. Using Allen’s approach, capitalism can be limited rather narrowly to the specific variety seen in Britain and some other ‘Western’ States up to the present time. What is less certain is how well Allen’s approach can be used to analyse ‘labour unrest’ in the more or less wholly statified economies that have evolved in underdeveloped countries during the present century. A more general model of capitalist relationships might encompass more diverse phenomena.
This relates to a further, less central point, that Allen tends to underestimate the present Government’s incomes policy and its general tendency. The continuities between it and earlier Tory approaches to national economic problems are stressed, but the discontinuities are not, perhaps, sufficiently emphasised. The acceptance of ‘planning’ by the Tories, developed further under Wilson, represents a partially distinct attempt to handle Britain’s economic problems in a new way. The emergence of capitalist planning in the postwar period is of some importance to the general analysis of capitalism. Planning and capitalism cannot be posed simply as alternative modes of organising an industrial economy: the class basis of planning, its purpose, is the crucial factor. Historically, the varieties of capitalist planning have evolved as more systematic and conscious attacks on working-class organisations. The ideological blinkers have not greatly altered, but the weapons have. The ruling class, like the working class, learns from its mistakes, and under pressure re-grinds its weapons.
None of this, however, should be read as denigration of Allen’s book, which is an important contribution to the current debate on incomes policy. This reviewer would have liked a more concrete analysis of the present state of the labour movement that focussed not only on the union leaderships but on the working class as a whole. This is, of course, more easily said than done. Cliff and I offered what was admittedly a very crude account of what seemed to us to be the central features of the present situation. V.L. Allen raises further questions in relation to this discussion that we can only hope he will examine in his next book.
1. V.L. Allen, Militant Trade Unionism, Merlin, 1966, 21s (cloth), 12s 6d (paper), 175 pp.
2. See, for instance, T. Cliff, Perspectives on the Permanent War Economy in A Socialist Review, SR Publications, 1965; M. Kidron, Rejoinder to Left Reformism, IS 7; H. Magdoff, Problems of United States Capitalism, The Socialist Register 1965; J. Gillman, The Falling Rate of Profit, Dobson, 1958.
Last updated: 20.12.2007