Monday 24 September 2018

McDonnellnomics and Class Struggle

Expropriating the expropriators wasn't a line I was expecting to come out of Labour conference, and it hasn't. Nevertheless John McDonnell's plan to hand workers 10% of the company they work for is entirely welcome. As he's pointed out in the round of interviews done this morning, it would encourage longer term thinking among (big) business, squeeze the imperative to maximise share holder value, give workers an income boost and ensure the state benefits from the productivity and profit gains by capping payments at £500 and returning the surplus to the Treasury. It might upset the FT and give the Tories the night terrors, but it has been universally welcomed across the party - Wes Streeting, for instance, was effusive in his praise.

As John has repeatedly pointed out, this is only radical in the context of British politics. Workers on boards, investment banks, key sector nationalisations and workers owning equity are commonplace in Western Europe. Germany remains the model, for instance. However, how does this help along the class struggle and enhance the position of our class beyond an extra 500 nicker in the pocket? Indeed, there is a subset of the left who are opposed to policies that introduce workers ownership and control this side of the socialist dawn because it supposes and encourages an identity of interests where there is none.

This implies an impoverished , zero sum and mechanical conception of class struggle whereas, in fact, we should see it as productive. What does this mean? To maintain its survival, the state as a capitalist state is compelled to maintain the class relationships underpinning it. Central to this is making sure there are a body of workers available to be subjected to wage labour, and there are innumerable strategies pursued by large numbers of institutions to make sure this is the case. But workers aren't drones. People who have to sell their labour power in return for a wage or salary aren't born that way, they're made. They - we - are continuously made. Proletarianisation is a process we are subjected to from birth and continues right through all the jobs and careers we do to the point we finally leave the workforce. It is (mostly) top down, and should properly be understood as force. But it is never complete. Proletarianisation always meets resistance, both of the individual and collective kind. It can be petty, like refusing to wear a compulsory lanyard or taking one's time in the loo, and it can be existential - like mobilising for an all-out strike. The point is capital confronts its employees as a tyrant stands above a free people and employs all manner of techniques to ensure compliance and acceptance. Resistance can be futile, but it is always inevitable.

Because proletarianisation is a process that begets resistance, its possibility proliferates with every new initiative and strategy that comes along. Of course, not all possibilities become opportunities, but what the McDonnellnomics programme promises are significant because they potentially amplify class struggle. On its own, the 10% stake puts into question capital's sovereignty over economic life by giving workers more of a stake, and where share ownership churns at a much higher rate than employees in and out the door it positions workers as the proper custodians of economic activity. It challenges the legitimacy of capital as an owner and of management as its custodian. Small wonder the CBI aren't happy - they instinctively know its against their class interests. However, it is only a potential. Strengthening workers at the point of production can be incorporated into the system. Capital can live with more worker involvement as, again, Germany and elsewhere testifies. It wasn't that long ago Britain chugged along with powerful trade unions who exercised their collective strength successfully against capital either. Our job is to make sure this is not the finished article but to push for more. Why 10% and not 20%, why not even higher? Likewise taken in conjunction with John's package of announcements, these would no doubt go some way to addressing the deep structural problems of British capitalism. And yes, it will make not a few business people and assorted Tories slick with fear, but in and of themselves they're not enough. A nicer capitalism it would undoubtedly be, but more importantly it gives us new conquests to defend and launch pads for further gains.

The right response to Labour's new economic plans isn't to tut, wag your finger and snottily decry it as not real socialism. It's to recognise it as something that is immediately tangible and realisable from our low point in the balance of power between capital and labour. It is to accept it as a set of measures that are productive of more possibilities of class struggle from a more advantageous position. And I'm sure this isn't something lost on John McDonnell himself.


Anonymous said...

Phil, some points.

Like much of Labour’s recent thinking on economic policy, McDonnell’s proposals are not radical (as you note). They are broadly consistent with the assumptions and aspirations of centre-left European social democracy. As such they form part of a package of measures that seek to change the terms on which labour is integrated into capital, while leaving the inherent logic and desirability of such integration unquestioned and intact. This has been the history of social democracy since about 1945, and McDonnell is firmly in that tradition.

But there are some obvious limitations that cannot be wished away by somewhat abstract appeals to the contradictions of proletarianisation.

Firstly, why will giving workers up to 10 per cent of a company’s shareholding ‘encourage longer term thinking among big business’? What is the plausible chain of causation here?

Workers may use their shareholding and board positions to protest against ‘short-termist’ actions. But, so what? They can be easily out-voted by the 90 per cent. They can maybe use their status to make their case at a shareholder meeting. But unless that case offers a similar value proposition, albeit by a less short-termist route, they will likely be ignored.

The assumption appears to be that there is a long-term pro-worker solution to the problems of corporate capitalism – if only workers could make themselves heard at shareholder meetings and board meetings. This is certainly an attractive and optimistic vision of how corporate capitalism works – but it strikes me as naive and groundless.

Secondly, what is the comparative evidence that similar schemes have ‘amplified the class struggle’ in the manner you hope? As you say, employee shareholder schemes of various types have been around for long time in many countries. They were often devised during periods of political and industrial turmoil as a means of integrating labour into the business logics and ideologies of capital. And they continue in the US and elsewhere because they are judged by many employers to help contribute to that aim.

If you want to get a sense of how things are likely to work out in practice, I think the ‘Workers Capital’ agenda offers some sobering lessons. The view that pension contributions constitute a form of capital that can used to nudge global corporations in progressive directions is popular in some countries where unions are represented on the boards of pension funds. The idea is that pension funds would use their leverage to promote long-termism, more investment in productive industry, less speculation, more sensitivity to the rights of labour etc.

This has not been the case, for all sorts of reasons. Pension funds are sometimes out-voted at shareholder meetings. They have been bound by law to maximise returns for members over other more progressive considerations. They have become heavy investors in global share and bond markets – just as happy to sell quickly when markets turn bad as any Wall Street bank. Some have become strong promoters of privatisation so that they can better expand and diversify their portfolios.

Of course, in theory, the potential is always there for workers on pension fund boards to ‘amplify the class struggle.’ But I don’t know anyone with experience in the Workers Capital field who would not snort with derision at such a suggestion.


Boffy said...

McDonnell's proposals are timid even compared to German social-democracy, to Harold Wilson's social-democracy, and as with the policy on Brexit, or the half-hearted approach to party democracy lead only to confusion and failure.

They are like suffering with an infection, and then taking antibiotics, but failing to finish the course, so that not only does the infection return in a more virulent form, but the effectiveness of the antibiotics themselves is reduced for everyone.

Germany has 50% of workers on company Boards. The Bullock Report commissioned by Wilson in 1975, went even further. The EU's Draft Fifth Company Law Directive proposed 50%. But, all experience of workers on Boards shows even 50% is insufficient. It simply leads to workers acting as tokens captured by shareholders.

The same is true of the Meidner proposals on transferring shares to workers, as was seen in its application in Sweden. More importantly, it confuses the message, when combined with the proposals over nationalisation. As Marx set out 150 years ago, these companies are already socialised capital. There is no need to nationalise them, or transfer shares to workers in them. Shareholders are only lenders of money to these companies, no different than a bondholder, a bank who gives a loan, a landlord who loans land or building in return for rent, or as John Kay said, even an equipment hire company that loans machinery to it.

All such lenders are entitled to interest or rent for having made these loans, and nothing more. The bank doesn't tell you what colour to paint your house just because its loaned you money to buy it. Shareholders are given an unjustified privilege over every other lender, be it a bank, a bondholder, a landlord etc. in being able to vote at company meetings, appoint Boards, and executives etc. A Labour government simply needs to change Company Law so as to remove that unjustified privilege that shareholders alone enjoy.

Shareholders are entitled to buy and sell share certificates and receive a market rate of interest/dividends on the money they have loaned - nothing more. Labour is clouding that message with its confused proposals on only appointing a minority of workers to boards, and on nationalisation. The actual capital of companies already belongs to the company, not the shareholders, and thereby to the workers. There is no reason to nationalise it, which would mean actually taking the capital away from the company's workers. Simply change company law to ensure that Boards must be elected by its workers and managers. Job done, no cost.

Speedy said...

Wilson's Britain and Wilson's unionsed working class were quite different to the emasculated work force of today. Although paradoxically that may make the proposal more workable.

I'm not sure if you can even compare Germany ever with the UK - certainly not in the past when there was much more class consciousness and tension.

I know nothing about the merits of this proposal (other than it seems a good start) but do know it will be ripped apart by the Tory press.

Shai Masot said...

It's a start. Let's not forget that it's only 4 yrs since Ed Miliband was called a Trot for just suggesting a temporary utility price freeze. So, hat's off to Jezza.