T. H. Wintringham

Rationalisation And British Industry—VI¹

Source: Labour Monthly, Vol. 10, No. 9, September 1928, pp. 565-571
Transcription: Phyll Smith
HTML Markup: Brian Reid
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All the contributors to this series have noted that rationalisation is a process which is continually going on in various ways during any normal phase of capitalist development. The question at issue is not the existence of this process in Britain, but the rate at which it is occurring in relation to world production and the world market. What we may call “effective rationalisation” implies an extension and speeding up of the process relative to the progress continually being made by Britain’s competitors; and this extension and speeding up must be so considerable as to enable British industry—in Varga’s words—“to regain its position on the world market and earn an average rate of profit on its industrial capital.”

Is “effective rationalisation” possible in the next few years in Britain? No. There are two principal reasons why it is not possible: one is that British capitalism cannot mobilise for this purpose the capital resources needed for a thorough overhauling of its industrial equipment; the other is that the resistance of the British workers to the increased exploitation necessary has proved and is proving too strong.

These two reasons are intimately connected: because British capitalism has not succeeded, despite great efforts, in reducing wages, increasing hours, and speeding up the workers (except at a great and ruinous cost in struggles) the main basic industries show a low rate of profit and have diminishing markets. Because of the low rate of profit, the capital that there is available goes into foreign investments or the luxury industries.

Certain forms of rationalisation can take place without great capital outlay. Certain forms can also take place without any considerable worsening of the conditions of the workers. These forms are actually the typical present forms of rationalisation that are being carried out to some extent in Britain. As Burns points out, they are mainly in restraint of trade; they do not lead to a boom even if extended they could not be considered as “effective rationalisation.” Dobb considers them likely to be “hardly sufficient to arrest even temporarily the tendencies of decline.”

The only forms of rationalisation known to us as having been “effective” have involved a large outlay of capital and a considerable worsening of the conditions of the workers. In Germany the workers were brought to a very low level of conditions and wages during the inflation period, and then American capital was made available (owing to the high rate of profit to be made by exploiting workers thus driven down). In the U.S.A. capital was also, of course, available in almost unlimited quantities; the attack on the workers took the special form of speeding up.

That this speeding up represents an attack on the workers comparable to heavy wage cuts or a drastic extension in hours is not generally realised in Europe, and a digression is necessary to show its effects. Only an example can be given: the accident rate. There are, of course, many other effects of equal importance.

In Britain in 1924 the number of cases of fatal accidents per 1,000 employed was 0.4; in the U.S.A. 3.51. Non-fatal accidents were 63.8 per 1,000 in Britain and 278.04 in the U.S.A.² During the period of rationalisation in the U.S. the accident rate was continually rising. The fatalities in coal mines were 3.94 per 1,000 in the U.S.A. in 1918 and 4.27 in 1919 (the comparable British figures are 1.39 and 0.94). In 1923 the fatal accidents in metal mines were 3.01 per 1,000; in 1924 they were 3.51; while the non-fatal accidents increased from 275.41 per 1,000 to 278.04. Next year there was a decrease in fatal accidents but a considerable increase in the number of non-fatal accidents (Labour Review, March, 1927). The Labour Review for August, 1926, reports that accidents were on the increase in every industry except iron and steel; it also notes that the increase in accidents corresponds with the increase in the production per man-hour. The intense, nerve-wracking, exhausting toil of the American factory can be judged by these few figures showing the number of those who are so dizzied by weariness that they fall victims to the machines they tend.

In America as in Germany, then, rationalisation occurred mainly by means of the worsening of the conditions of the workers. (The unparalleled duration, extent and degree of success achieved by American rationalisation—which has been effective as against almost all competitors in almost all markets since the end of the war—is partly due to the better effect on the home market of speeding up as a method of increasing the rate of surplus value, as compared with cutting wages. America’s rationalisation was of the enlightened I.L.P. type advocated in “Labour” propaganda to-day; it was none the less directly at the expense of the workers.)

We can conclude from these two historical examples of America and Germany that effective rationalisation in Britain, if it is to occur at all, must take place after, or at any rate together with, a general worsening of the conditions of the British working class. This worsening of conditions may take place by means of wage cuts, extension of hours, or speeding up.

All these have been attempted by the employers during the past six years. And the attempts have been in the main successful. But the struggles have been so costly and so slow that the “benefits” won by British industry in this way have not counterbalanced the tendencies of decline.

Varga deliberately excludes from his consideration of the rationalisation of British industry the possibility of a “general resistance on the part of the working class to the intensified exploitation which is inseparable from rationalisation.” “Whether this will occur,” he says “is a question which we shall not discuss here.” He does, however, proceed to discuss it at the end of his article—somewhat summarily. “Determined and successful opposition” (by the workers to rationalisation) is, he says, “not very probable after the severe defeat of the British working class and the treacherous acts of the reformist leaders.” This is completely incorrect, since it omits the fact that determined resistance has actually been put up, and (in spite of its leading to severe defeats and a plentiful crop of treacherous acts) this resistance has so shaken the structure of British capitalism that effective rationalisation has been objectively impossible.

Campbell, in the second article in the series, does not deal with working-class resistance except as a duty of the Labour movement. Burns, however, sees that “the factors of the class struggle at home and of the colonial struggle are too lightly treated by Varga . . . there is a widespread ‘leftward’ movement among the rank and file against industrial peace. . . . British capitalist policy is also made indecisive by the constant dangers of revolt in China, India, and Egypt . . . these are real obstacles to rationalisation.”

Rathbone and Dobb do not deal with the question of working- class resistance to rationalisation. This article may, therefore, well be restricted to that aspect of the question of rationalisation, since it is an aspect which is of first-rate importance.

We can only deal, in the present article, with certain of the past struggles of the British workers as examples of their resistance to rationalisation. The question of how to continue that resistance during the present period (which is not one of “treacherous acts” by reformist leaders but one in which the whole machinery of the T.U.C., of most of the individual unions and of the Labour Party has been mobilised to break down the workers’ resistance to the will of their employers) needs a further article. So does the question of the effect of the colonial struggles.

The general strike and the miners’ struggle were very definitely efforts to resist rationalisation. Both these efforts were in fact defeated; but the capitalists won their victories at so high a cost that they could not carry out effective rationalisation.

The solidity of the resistance of the workers in July, 1925, surprised even those who organised it. The capitalist state had not then made sufficient preparations for a general stoppage, and sections of the capitalist class were unwilling to take risks in support of coal-owners who had shown themselves incapable of using a previous heavy cut in wages to secure rationalisation. The Times wrote that the coal-owners must withdraw their notices (leading article of July 29, 1925, two days before “Red Friday ”).

The Samuel Commission was appointed to work out a complete scheme of rationalisation for the industry. Its report advocated immediate steps towards amalgamation (including State pressure on firms unwilling to amalgamate), close association with other industries (i.e., “vertical combinations”), electrification, pooling of transport and sales resources, a double-shift system at the more profitable pits, and lower wages. And on this one point of lower wages the fight came.

In the final critical negotiations before the general strike, the wages question was the only real issue. On this point even the last-minute attempts of the T.U.C. could not get the miners to shift. So the Government, having now made all its preparations, declared war. Why? Because this point—the reduction of wages—was for British capitalism the first and most vital point. It was the essential pre-requisite for effective rationalisation.

The reduction of wages was achieved, and also an extension of hours. But these gains for capitalism have not made up for the ground lost during and because of the struggle. The output and export figures prove this.

Since the miners’ struggle, in spite of the reduction in wages, the speeding up, the longer hours, some county “cartels” and the increased use in machinery, no “effective” rationalisation has taken place in the coal industry. That the figures prove. And the reason for this is that the Opposition of the workers has been too great.

Just as the circumstances of the beginning of the general strike show with perfect clearness that effective rationalisation is, for Britain, dependent on wage Cuts, so the end of the strike showed clearly the strength of the British workers’ opposition to such cuts.

After the strike had been proclaimed settled railwaymen went to their depots. There they found posted notices imposing savage conditions for reinstatement. They did not go in to work, or if they went in they soon came out again on receipt of telegrams from the unions ordering them to remain on strike until re-engagement terms were settled.

This was general throughout industry in the forty-eight hours after the strike was called off on the Wednesday morning. It was not until the next Monday evening that the London papers could resume normal publication; and their trouble was with their men.

The Government had to appeal for forgiveness by the employers, and some of the original terms proposed for return to work had to be modified in favour of the men. The Government had been staggered by the strength and solidity of the strike, and could not face further struggle until the miners were beaten. For the remainder of 1926 the stubborn resistance of the miners held up practically all wage cuts in other industries.

On a smaller scale the Stalybridge strike shows the resistance that is being put up to extension of hours. No official trade union lead was given, but Communists were at the gates of the mills affected at 5.45 a.m. to start the picketing, and the strike was a success. The working class showed itself able to resist.

The generosity of Mr. Thomas with the wages of the railway-men may be taken to show that resistance will be less now that the period of “Mondism” has begun. A cut of 2 per cent., when the railways need more than that, not to rationalise their equipment but even to keep their profits at their present fairly low level, cannot be taken to show that “Mondism” will succeed where previous efforts of the same sort failed.

The significance of “Mondism” should mainly be looked for in another field. Its first achievement was to secure the support of the trade union movement for the demand for inflation of the currency made by a section of the industrial capitalists (Memorandum on Banking Policy, &c.). This was treated with what amounts to contemptuous silence by the ruling finance-capitalists and their Parliamentary spokesmen. The present aim of the Mond Conference is to reduce the losses to capitalism caused by industrial struggles. This effort to reduce losses neither implies an actual truce in which no reductions are to be attempted, nor a general attack on a large scale from behind the smoke-screen of “Peace in Industry.” An actual truce is impossible because various industries will need their 2 per cent. cuts; a general attack is unlikely during the period of Mondism because it implies the possibility of the workers sacking the present trade union leadership, and carrying out unofficial struggles none the less costly because only partially organised. How real the will to struggle is, even amongst those worst defeated, is shown by the miners: the putters’ strike in the Tyneside and the events in Scotland. It is noteworthy, in regard to the latter, that W. Allan, the leader of the Left Wing in Scotland, wrote in the Sunday Worker for August 12 that the Ayrshire Miners’ Union was “a pocket borough of the reactionary officials”; next day came the news that this county union had voted by a majority for the sacking of the Right Wing leaders. The feeling of the masses of the miners is going to the Left faster than is always realised.

In these circumstances Mondism should not be considered mainly a means by which the opposition to rationalisation can be broken through (although the next main feature of it to appear may be an attempt to put through drastic speeding up on the American model). It should be looked upon mainly as preparation for British imperialism’s alternative to rationalisation—war.

To sum up, we may say that the resistance of the British workers has up to the present made effective rationalisation impossible. The industrial capitalists of Britain who need urgently some “way out” of the present depression have three alternatives—ruin by stagnation, ruinous economic losses and political risks by further heavy attacks on the workers’ conditions (direct or by inflation), or the more immediate and desperate risks of war. The business of Socialists is, therefore, to see that war is fought now and in the future as fiercely as wage-cuts have been, and that if inflation occurs the workers find expression for their will to fight against this way of reducing their real wages—meanwhile carrying on and strengthening the struggle against increased exploitation wherever possible, along the lines that may have brought “defeats” for the workers, but have also weakened and shaken the capitalist class.