Back to Nina Fishman index


The Communist no 56, December 1972

NOTE: Square brackets indicate comments by the editor. Subheadings as in original.


What is a Freeze?
The Ruling Class and the Market
What the Working Class Has to do with Freezes
What the Working Class Can Learn From the Freeze
Why It Took Five Months of Public Discussion to get a Freeze
Ruling Class Thoughts and Trepidations
What Next?


On Thursday 2nd November the tripartite talks between the TUC, CBI and the Government failed to reach agreement on specific proposals to move towards the "objective agreed by the three parties for economic management in the present situation, namely faster growth in national output and real incomes; an improvement in the relative position of the low paid and moderation in the rate of wage and price inflation. We are all in full agreement on the objectives." (From Heath's statement on breakdown. Financial Times, 3.11.72) The failure to reach voluntary agreement was greeted with almost audible sighs of relief from the Labour Party, many bourgeois commentators and sections of the Conservative Party. There has certainly been no pressure from any political quarter on the three participants to try again to gain "another prize which in the long run may prove of even greater worth (than the curbing of inflation etc, NS). That is the prize of having a more sane, more rational, more peaceful method of organising the whole of our national economy." He was referring here to the Government's proposal that if the Downing Street talks succeed the CBI and TUC would join with the Government in a permanent body to help decide the nation's economic and social priorities in the futures" (FT report of Heath's speech on new Parliamentary session, 1.11.72)

On Monday 6th November the Government announced that it would impose a 90 day freeze on prices, wages and dividends in order to give the nation the necessary breathing space in which to work out a longer-term approach to inflation. During this time the tripartite talks were to continue. It had become necessary to enact a Freeze while continuing to talk about what to do next because the initial talks had raised inflation as an economic problem which had to be faced if 'life as we know it' were to continue. The Government had to take what it said to the TUC and CBI (and on which the two had agreed) seriously; if there had been no freeze it would have been legitimate to ask why the talks had been convened in the first place. But, "the real test of it will come (that is the Freeze), as the Government must be all too uneasily aware, when we move on from Phase One to Phase Two (the longer term agreement, NS). Means have somehow got to be found during the next few months of ensuring that the sequel to the freeze is not an explosion of prices and wages which would make faster economic growth impossible. It is to be hoped that both the CBI and the TUC, once over their initial disappointment, will feel able to play their part in devising workable machinery." (FT leader, 7.11.72)

At a meeting on 8th November, the TUC economic committee stated that further discussions were impossible "'in circumstances where the results of collective bargaining are to remain frozen by such ill-judged and objectionable provisions'. This however leaves a possible loophole because union leaders could argue later that collective bargaining was not 'to remain frozen' in the second stage. In other words, the door has been left open for talks to be started, maybe after Christmas, when initial anger over the freeze may have cooled. Significantly, Mr Jack Jones, of the Transport Workers, who attended a parliamentary lunch- time gathering said 'We are prepared to talk and negotiate in the best interests of the British people because we are as British as anyone who claims to be, from any other quarter.'"(FT, 9.11.72)

The TUC's reaction stiffened when the Government announced that negotiations conducted during the Freeze period would have to be examined in the light of whatever ground rules Phase 2 laid down for for wages, i.e. that collective bargaining as normal would be unwise because for the foreseeable future there would be no 'as normal'. The CBI therefore advised employers to defer negotiations until Phase 2 had become clear. Vic Feather said, "My advice to unions and to employers is to go on talking and to go on negotiating. If some employer accepts what I consider irresponsible advice about freezing negotiations, he will be heading for unnecessary double trouble. He will not only be in trouble about the freezing of wage increases but also in quite extraordinary trouble if he were to refuse negotiations on account of the freeze." (FT, 23.11.72)

On 22nd November the TUC General Council also decided "'it did not want any more tripartite talks on the economy ... The decision ... stems from a belief that the CBI's presence in Downing Street was counter-productive. But the TUC is expected to be willing to have talks alone with Ministers some time in the future on plans for the next stage of the wages policy - provided the initiative comes from the Government. This decision came after a long argument in the council, with moderate union leaders arguing that they must find out what the Government has in mind while Left-wingers argued that talks had been shown during the past weeks to be a waste of time and should not be repeated. It seems therefore, that at some time during the coming weeks the TUC will probably hold talks with the Government on the second stage of the statutory policy." (FT, 23.11.72)

The logic of the TUC's position both on the freeze and on continuing talks is directly contrary to the logic of their participation in the tripartite talks. By seriously taking part in the talks, the TUC acknowledged that a problem existed. When the talks failed to find an approach to the problem, the Government legislated a stopgap. Moreover as we will see, its legislation took into account and made concessions to every aspect of the TUC's bargaining position. The TUC stated its grievance to be that the economic struggle was not to be let go on "as normal" and is very clearly not therefore going to provide any lead to its member unions as to how to behave during the Freeze except as 'normal'. Furthermore, the TUC made these statements in the clear knowledge that it would again be talking with the Government about 'the problem of inflation' and that further policies which alter normal collective bargaining will emerge out of those talks. How is this contradictory behaviour to be explained? Similarly contradictory is the behaviour of the Government over the last three months. Its volte-face towards the economic struggle was outlined in the October Communist. In that article ... [the rest of the line is cut off at the bottom of the page - PB]... analyse these contradictory behaviours by showing that they are consistent - not with any internal spiritual or principled logic but with the facts of the situation.



The fact that any Government should adopt a statutory freeze on wages and prices is hardly an occasion for surprise or wonder. As stated in October, Britain has had some form of wages or prices control in every other year since the end of World War II. With the exception of Germany and Japan, major industrialised 'Western' countries have used wages and prices control at various intervals since the wars Indeed France has literally never been without some form of price control while the Netherlands has operated with an agreed national wage bargain since the war. When recently trade union pressure cancelled this agreement, the only result was worse inflation and fresh union determination to come to a new agreement.

What is the function of freezes and incomes policies? "Ever since the wage-price explosion of the winter of 1969/70, it has been clear that any tolerably successful economic strategy would have to have three main elements: a temporary and statutory wage price freeze; a firm control over the money supply and what may be called in shorthand a 'realistic' policy towards the exchange rate. These are not panaceas; and they cannot by themselves resolve the major economic tensions of modern society, in particular those produced by trade union monopoly power. But they are the main devices so far evolved for keeping the system running without an explosion." (S.Brittan, FT, 9.11.72)

"There has by now been a good deal of experience in both this and other countries with freezes, ceilings and voluntary and statutory restraint. The evidence suggests that the initial emergency period of a stand-still is surprisingly successful; the secondary stage of follow-up has some diminishing degree of success, provided that it is statutory, while the long-term policy from which so much is hoped never seems to materialises" (Brittan, FT, 7.11.72) "The Federal Reserve Bank of Richmond in the US put it very well in its October journal by saying that wage price policies should be 'temporary and episodic' and that 'the Phase II machinery should be maintained just long enough to eliminate inflationary expectations and to improve the wage price performance of the economy." (Brittan, FT, 9.11.72) "There are however two things that a freeze can achieve with skill and good luck. It can reduce to less alarming proportions people's ideas of how fast prices are likely to rise. This will lead, in any given state of the labour market, to a lower rate of money wage increases than would otherwise be expected. Secondly, a freeze can provide a breathing space in which the increase in the money supply can be slowed down to a less inflationary pace without halting expansion and causing a slump in employment. Some of the politicians who talk about controlling the money supply give the impression that it is a form of magic and that, if only the Chancellor would order the Governor of the Bank of England to manipulate pieces of paper, inflation would be painlessly squeezed out of the system. If it were that painless, some major country would have adopted this policy long ago and allowed its currency to appreciate against the rest of the world. A rigid limit on the money supply is in effect telling the trade unions that the authorities will refuse to finance the results of wage deals too far in excess of the rise of productivity, but that unions are perfectly free to settle for more money for fewer jobs if they so wish. No democratic government has in fact been prepared to allow unemployment to go that far ... The role of a freeze is to allow the money supply to be reduced in such a way that it will lower the rate of inflation without causing a destruction of jobs." (Brittan, FT, 7.11.72)

Today in Britain, the reason for a freeze or indeed any form of incomes policy, is that through the economic struggle the working class is able to take so great a portion of the value it produces that the amount of surplus value the employer appropriates is insufficient to carry on production. (Previous freezes here have been because "resources had to be switched into exports and import-saving to eliminate the payments deficit of the 1960s; and because the devaluation and the supporting measures were delayed so long, the switch of resources had to be concentrated in a very short period, and an exceptionally high surplus earned, to pay off debt and restore confidence." Brittan, FT, 16.11.72)

The only alternative to a freeze which has been put forward by anyone in the present public discussion around the breakdown of the tripartite talks is Enoch Powell's solution: "the monetarist viewpoint implies one of two things: either standing aside and letting prices run away out of control, or regulating the money supply in such a way that employment is bound to suffer. It would involve throwing out of the window all talk of 5% or any other rate of growth and of any conscious policy towards unemployment whatsoever." (Brittan, FT, l.11.72) A freeze/incomes policy is nothing more or less than the conscious attempt to regulate money wage increases. It becomes possible then to regulate prices because the labour content involved in prices has first been regulated. "The Scanlon-Jones view that it is more important to control prices than to control wages is the opposite of the truth. The object of an incomes policy is to prevent trade unions pushing money wages through the ceiling. If it can succeed in doing this, commercially determined prices will largely look after themselves. Almost every official and economist concerned with this issue, irrespective of his politics, is primarily concerned to limit money wages; and the price control aspects are put in primarily as bargaining counters and public relations gestures. This preoccupation with wages is not due to malevolence but to the facts of the case. One can argue until the cows come home about whether British (or world) inflation is due to an excessive growth of the money supply or trade union wage push. But whatever the precise relationship between these two factors - and they are obviously both at work - the one thing that the current inflation is not due to is a push from the side of profit margins. If the lack of control of prices had anything to do with the recent inflation, it would be difficult to explain why there has been such a sharply falling trend in the share of profits in the national product. Trading profits, net of stock appreciation; averaged 10-12% of final output in the decade up to 1964 and were down to 7% in l970. Of course there has been some recovery since then, due to the well-known fact that the share of profits rises in the upward phase of the business cycle - one has yet to see the unions complain when it falls in the recession stage. The true long-term fall is in fact much more severe than the published figures which relate to gross profits. The net rate of return on capital, if proper allowance is made for inflation, has been declining so sharply that some would-be Marxist economists (Glyn and Sutcliffe, see October Communist, NS) have been warning that capitalism will collapse unless the capitalists fight back. Whatever else these trends suggest, it is not a profit-push inflation. There have been several more direct studies of the relation between wages and prices in the UK. These have nearly all pointed in the same directions. As the latest and best documented study by Godley and Nordhaus ... shows, prices in the non-food manufacturing sector can be best predicted by looking at current costs, namely labour, materials, fuel, services and indirect taxes corrected for cyclical distortion and assuming a constant mark- up. A clear implication is that if wages rise less quickly so will prices. Of course there are many objections which can be raised against this theory. But its divergence from reality is the very opposite of what anyone listening to Jones and Scanlon might suppose. For prices in the first few years have risen less than costs calculated in this way as profit margins have been under pressure. Price control has less than zero to contribute to fighting cost inflation." (Brittan, FT, l.11.72)

Food prices account for one quarter of all items (on a weighted basis) of the cost of living index and sales through food shops account for more than 40% of all retail sales. Why can they not be controlled or treated in the same way as other prices?



''The decision to exempt, from the prices standstill, those goods in which raw materials or raw agricultural produce account for a high proportion of total cost was not ideal politically ... But Mr Heath had little option. Britain remains dependent on imports for some 45% of its food needs and most of the raw materials used by industry; its purchasing power is simply not big enough to dictate prices on world markets (in contrast to her ability to do so in the 19th century, NS )." (FT, 8.11.72)

Nevertheless, there is every indication that the bourgeoisie would have given strong support and pressure to a determined stand by the TUC that the Common Agricultural Policy effects which will begin to be felt on 1st January should have been stood out against by the British. The FT leader of l1.11.72 suggested that the Government should do just that: not only for our own national interest but also because it would bring considerable support (if only tacit at first) from all other EEC countries (except France which is the only EEC country to benefit from the EEC Common Agricultural Policy). The clear implication being that the CAP survives because the French are the strongest and most adept politically and that Britain should counter this with asserting her own national interest and political counterweight thus benefiting the EEC as a whole. On 4.11.72, S. Brittan wrote, "Another special factor (in working out how much prices will rise if wages are [do?] not, NS) will be the CAP, which can be regarded as a heavy membership [price?] for Common Market entry. Much the most sensible aspect of the last TUC statement is the implied suggestion that we should plead the inflationary emergency as grounds for limiting the food import levies next year and for negotiating a longer-term shift from high farm prices to deficiency payments. This is the least that a French Government would have done if it had the same national interest as British Ministers."

In addition, on the 22nd November the Government decided to remove the import quota on apples. The FT commented in its leader for the 23rd: "The argument that nothing whatsoever can be done about food prices because all of them are the product of international market forces is only partially correct. The decisions that Government make can, and do, affect the prices that are paid for various foods, at least in certain circumstances. This may require long-term planning. ... (e.g. stimulating home production), Governments can also determine the rates of taxation and the pattern of distribution. The value of this in influencing retail food prices can be deduced from a recent Common Market study that reveals wide disparities in the profit margins, distribution'costs and final retail prices of various foods inside the existing EEC of the Six. Again, yesterday's Government decision to flood the British market with imported apples is further evidence of the fact that there are times when the authorities most certainly can do something effective about prices. This decision has all the hallmarks of haste and overreaction that usually indicate that a Government is feeling nervous about the trend of opinion. There should be little difficulty in understanding this: when good eating apples cost a shilling each, it becomes a political issue. ... It should therefore be plain that if a Government decides upon a cheap food policy it can go some way towards carrying out that decision. There is a proportion of all food prices that cannot be affected by the juggling of quotas, levies, subsidies, taxes, price controls, or any other devices, but this proportion is by no means the whole of the story. It is important for the Government to appreciate this, since if its search for a general understanding on wages and prices to follow the freeze is to have much chance of success it must at the very least be seen to be doing its utmost to keep the price of food down, both now, and after Britain joins the EEC (another broad hint about CAP, NS). Hiding behind generalisations about 'market forces' is not sufficient; the action taken on apples is an indication of what can sometimes be done."

The Downing Street talks in fact ended before any real discussion or negotiation had begun. The CBI were astounded when after Heath had presented the Government package deal on the 2nd the TUC were immediately as one man convinced that there was no basis for discussion. It is clear that if discussion had proceeded there would have been support from the CBI for as much control of food prices by the Government as is practicable - i.e. those prices which the Government can influence and can be held without affecting the home market rate of profit. It also seems equally clear that this would have been the case given the highly academic case of real profiteering taking place. Such profiteering results from a seller's market; the best examples being the last two wars. By the second War the bourgeoisie were paying 100% excess profits tax (a notional normal rate of profit having been agreed with the coalition Government) with nary a whimper.



The situation that confronted the TUC, CBI and Government was this: the power of the working class in the economic struggle determined that the amount of value the bourgeoisie could appropriate was insufficient to ensure reproduction let alone growth of capital in Britain. The consumption of the working class today meant that there would be no capital to provide means of production for the working class to use in producing value tomorrow. There can be no working class consumption if there is no means of production with which to produce consumption goods. The Left have been trumpeting the true message loud and clear since the summer: it is the working class's right to increase its wages and that right must be defended against wage freezes etc or else its present standard of consumption will be attacked by the Tory sharks. The limitation of wages is a clear-cut act of greed and vendetta thought up by the employers because they dislike the working class. To actually agree with the Government, TUC and CBI that there is a problem is an act of treachery against the working class's true interests: "Heath is laughing his head off, because the TUC leaders are taking part in a political ploy which he has thought up for the benefit of the Tory Government and the employers whom it represents ... At this moment of greatest difficulty, when opposition to Tory policies is mounting on issue after issue it (a voluntary agreement, NS) would be like a lifeline to save a sinking Government. It would not only be a stab in the back for millions of workers who are rightly fighting for pay demands far in excess of what either Heath or the TUC General Council has suggested as the 'norm'. It would also be a blow against the Labour and Communist members and supporters who are campaigning to force the resignation of the Government and defeat the Tories in a General Election. TUC leaders try to justify their decision to go into the Chequers talks with the argument that if they can get the Government to agree to increase pensions, take some steps to moderate price and rent rises, and not use the Industrial Relations Act, it will be worth while to surrender the right to bargain for the best possible wages. But trade unionists have the right to demand all these things, and use their strength to compel the Government to grant them, without any qualifications or conditions." (Morning Star, 26.10.72)

"Suddenly everyone's concerned about the low paid. Millions of working people have suffered for years under the burden of near-starvation wages. Successive governments have done nothing to help them - on the contrary, their policies have further depressed the wage levels of the poor. ...But now scarcely a day passes without a weeping politician or newspaper tycoon beating his breast about the plight of the low paid. Is it a deathbed conversion to the cause of decency on the part of the Tories and their press friends - or is it just a cheap propaganda device to sell the swindle of the pay and prices freeze?... The freeze must be smashed. There is only one way to do it - by industrial action. Talks, petitions, lobbies of parliament will not budge this arrogant and vicious government of big business interests ... Such action must grow and multiply. A concerted movement can defeat the Tories' aims. We must demand of our union leaders that they take the initiative in organising widespread strikes to pursue and obtain every wage demand in defiance of the 'counter-inflation' law. But as their recent record proves, it would be futile to wait for them to issue such a call."(Socialist Worker leader, 25.11.72. NB; I omitted no substantive points from this leader. It simply makes the statements that the Freeze "must'' be smashed and action against it "must grow and multiply". The only reason discernible from the leader is that the Queen and stockbrokers earn more than farm workers and farm workers are more essential to society and therefore entitled to earn more.) "Heath's 'anti-inflation' plan is nothing more than an attempt to con millions of workers into accepting a cut in their living standards ... If the government's plan is accepted, anyone earning around the average industrial wage can expect to see the value of this take-home pay fall steadily from now on. Where will this buying power go? Not to the lower paid, as we have shown. Instead it will automatically boost company profits and serve to increase dividends and profits. And the Tories have not even made the pretence of restraining these." (SW, 30.9.72)

It is instructive to read what Marx had to say about the plank in the Gotha Programme which stated, "'The emancipation of labour demands the promotion of the instruments of labour to the common property of society and the co-operative regulation of the total labour with a fair distribution of the proceeds of labour.' ... Do not the bourgeois assert that the present-day distribution is 'fair'? And is it not, in fact, the only 'fair' distribution on the basis of the present-day mode of production? Are economic relations regulated by legal conceptions or do not, on the contrary, legal relations arise from economic ones? Have not also the socialist sectarians the most varied notions about 'fair' distribution? ... But 'all members of society' and 'equal right' are obviously mere phrases . The kernel consists in this, that in this communist society every worker must receive the 'undiminished' Lasallean 'proceeds of labour'. Let us take first of all the words 'proceeds of labour' in the sense of the product of labour; then the co-operative proceeds of labour are the total social product. From this must now be deducted: First, cover for replacement of the means of production used up. Secondly, additional portion for expansion of production. Thirdly reserve or insurance funds to provide against accidents, dislocations caused by natural calamities, etc. These deductions from the 'undiminished proceeds of labour' are an economic necessity and their magnitude is to be determined according to available means and forces, and partly by computation of probabilities, but they are in no way calculable by equity. There remains the other part of the total product, intended to serve as means of consumption. Before this is divided among the individuals, there has to be deducted again, from it: First, the general costs of administration not belonging to production ... Secondly, that which is intended for the common satisfaction of needs, such as schools, health services, etc. . . Thirdly, funds for those unable to work, etc...Only now do we come to the 'distribution' which the programme, under Lassallean influence, alone has in view in its narrow fashion, namely, to that part of the means of consumption which is divided among the individual producers of the co-operative society. The 'undiminished proceeds of labour' have already unnoticeably become converted into the 'diminished' proceeds, although what the producer is deprived of in his capacity as a private individual benefits him directly or indirectly in his capacity as a member of society ... Accordingly, the individual producer receives back from society (in a communist society "not as it has developed on its own foundations, but on the contrary, just as it emerges from capitalist society" NS) - after the deductions have been made - exactly what he gives to it. What he has given to it is his individual quantum of labour ... Here obviously the same principle prevails as that which regulated the exchange of commodities, as far as this is the exchange of equal values ... Hence, equal right here is still in principle - bourgeois right ...This equal right is an unequal right for unequal labour. It recognises no class differences, because everyone is only a worker like everyone else; but it tacitly recognises unequal individual endowment and thus productive capacity as natural privileges. It is, therefore, a right of inequality in its content, like every right. Right by its very nature can consist only in the application of an equal standard; but unequal individuals (and they would not be different individuals if they were not unequal) brought under an equal point of view, are taken from one definite side only, for instance in the present case, are regarded only as workers and nothing more is seen in them, everything else being ignored ... But these defects are inevitable in the first phase of communist society ... Right can never be higher than the economic structure of society and its cultural development conditioned thereby ... I have dealt more at length with the 'undiminished proceeds of labour', on the one hand, and with 'equal right' and 'fair distribution', on the other, in order to show what a crime it is to attempt, on the one hand, to force on our Party again, as dogmas, ideas which in a certain period had some meaning but have now become obsolete verbal rubbish, while again perverting, on the other, the realistic outlook, which it cost so much effort to instil into the Party but which has now taken root in it, by means of ideological nonsense about right and other trash so common among the democrats and French Socialists." (Critique of Gotha Programme, pp 13-17, Progress Publishers pamphlet, 1966. All emphasis is Marx's)

Perhaps the CPGB and IS [International Socialism, forerunner of the Socialist Workers Party] believe that British capitalism is endowed with supernatural powers of which Marx had no inkling let alone analysis. This is the only logical conclusion from their exhortations to the working class which it is possible to draw. 'You have the power to consume everything you produce and therefore it is your right to do so'. It of course follows that every item which Marx enumerated above which had to be deducted before the working class's consumption of its product has also to be deducted under capitalism out of the workers' consumption (under capitalism remember the working class is the only source of value.) The much-vaunted inequalities in distribution of wealth between the working class and the bourgeoisie are indeed inequalities of wealth and not consumption. Lord Stokes certainly does not consume the value of all British Leyland's factories in one year, though he owns them. Nor indeed does he consume all the steel etc which are the raw materials for the cars BL workers produce. Far and away the main consumers in our society are the working class. Wages and salaries account for 6l% of the society's annual production. Inequalities of distribution of consumption may outrage the moral sensibilities of IS and the CPGB; their redistribution will not make provision for the reproduction of society or even a much increased working class consumption. It is quite true that the bourgeoisie's interest in an incomes policy is the survival of capitalism. It is equally true that the alternative which the CP and IS put forward is that capitalism has no right to reproduce itself and the working class has a right to consume all its production. Perhaps IS and the CP believe that socialism will be like that - Marx certainly did not and was clear that such ideas were reactionary. But then perhaps the IS and CP view is in fact in tune with their moral conception of the working class: i.e. if it consumes all its product this time round, the next time round it will starve. But after all it will be pure in its starvation because it will have refused to surrender one tittle of its product to the bourgeoisie in the form of profits. As profits are the root of all evil, the working class simply does away with them and in so doing purges the society of its sin ... and its means of survival.

In this situation such ideas have the effect of obscuring one of the central features of capitalism - that the appropriation of surplus value from the working class is necessary to capitalism's (and society's) survival. Moreover, it is a central feature that has been forced into the political arena to be discussed and considered by both classes openly because of the growth of the working class's political power. (See the Brittan quotes earlier in this article about why the market cannot be let rip to solve inflation if you are in doubt on this point).

The bourgeoisie have not asked the working class to reduce its level of consumption. Heath's calculations for the package deal were made using the 6l% figure as given; as stated in the October Communist, the increase in profits will not come at the expense of working class consumption but through the utiIisation of spare capacity and increased productivity that always accompanies expansion in a capitalist economy. If there is one thing that this Conservative Government is clear on it is that the economy will be put on an expansionary course insofar as Government action is able to ensure this (e.g. by refusing to let a crisis in sterling appear). The real income of the working class will also increase in an expansionary situation since the 61% will represent more production. The redistribution of consumption towards the lower paid was in the package deal at the trade unions' instance; that the lower paid should be given more 'justice'. The bourgeoisie simply made the point that that justice must come from the redistribution of working class's consumption: there was simply no more slack. At this point in time, the alternative is very clear: either there is some form of incomes policy or the level of consumption of the working class will indeed deteriorate because capitalists will start going out of business in a big way through lack of capital . There will be unemployment and hardship in the working class engendered not through bourgeois meanness but through the refusal of the working class to face up to the realities of capitalism. The working class lose nothing by doing so: they sign away no right, they lose no power. Indeed the working class gains. Not merely in terms of its increased level of consumption but also in its understanding of capitalism.



Up until now the working class's understanding of their place in capitalism has been non-existent. The economic struggle is at present waged not because the workers seek to appropriate some of their own surplus value back; but in order to defend and extend the working class's place within capitalism. There is certainly no notion present in the working class of where the money for its increased wages comes from. The money for the increase is there because the boss is the boss and therefore 'has the money there'. This explains the working class's reaction on being made redundant: there ought not to be any redundancy because it is the function of the boss to provide work. If he does not provide work, he is not doing his job. The appearance that the boss consumes more than each individual worker would seem to bear this interpretation out as would the formal aspects of property ownership. The firm is the boss's therefore it is his job to make sure that it keeps running and that it should provide the working class with jobs and a good living. What do the 'left' tell the working class about this view: that it is quite right to expect these things, of course they must be struggled and fought for but they are the working class's right. They will never be won in full of course; but then it's only really under socialism that we can have our cake and eat it. This view of capitalism does not explain (1) that the essential function of the bourgeoisie is to appropriate surplus value for reproduction and accumulation (2) that it is [the] labour power of the working class that constitutes the force keeping capitalism and society ticking over. It is hardly surprising that the working class is not socialist when their view of society is that it is the prerogative of the boss to provide or not provide them with a job and wages. Therefore when these are not forthcoming it is due to the boss's will. It is equally true to say that the most developed view of socialism today in the working class amounts to a belief that if the bourgeoisie are wiped out as a class, then socialism will ipso facto have arrived. It is the bourgeoisie who are responsible for capitalism, therefore if they are liquidated, there will no longer be any obstacle to socialism. It will be seen that this accords with the view that it is the bosses who provide jobs and wages. Understanding that appropriation of its own product is necessary to capitalism's reproduction is the first step in understanding why and how the working class can establish socialism: that it is the working class through the production process who make reproduction and accumulation possible. That the bourgeoisie can indeed not provide jobs or wages without appropriation of surplus value from the working class; that the bourgeoisie's power stems not from any innate or given quality of bossness or the absolute nature of employerdom but because they are merely instruments or vehicles for the appropriation of the working class's surplus value. Now, this certainly does not alter the relation between employer and employed, it does, however, make its ''kernel'' or "essence" apparent, it forces it to the surface. The plain fact of the matter is that the bourgeoisie have had to invite the working class to sit round the table with it and discuss how the level of appropriation of surplus value is to be maintained and extended so as to ensure continuing social survival and prosperity. The bourgeoisie have accepted that in order for the working class to sit around the table, it has a "right", (i.e. power in fact - see the Marx quote earlier) to put demands on how that surplus value is apportioned; whether to old-age pensioners, to subsidise rents, increase investment etc. At the present time, if the working class armed itself and went out tomorrow and liquidated every member of the bourgeoisie, the only thing that would happen is that the more conscious members of the working class would become the bourgeoisie of the day after tomorrow. Until the working class is capable of replacing the bourgeoisie as the vehicle of accumulation of its own surplus value with a system whereby the society as a whole does the accumulating and makes the decisions about reproduction and accumulation, the bourgeoisie will be a socially necessary class.

By explaining to the working class exactly why the talks are necessary for the continuation of capitalism, the left would enable the working class to learn from history. It is only when a class learns from the situation it finds itself in in history that it can exert conscious control over that situation. Socialism will be established not by the free will of the working class, but by the working class consciously using its position in the production process . As long as the working class sees the employing class as an essential part of that production process, capitalism will continue.



It is necessary to examine what marks out this attempt at Incomes Policy from other previous attempts both in Britain and elsewhere. The highly successful American "New Economic Policy" was grafted onto the society by Presidential prerogative. At first sight this appears mere than slightly bizarre. After all, the American bourgeoisie and working class have always stood four-square behind the principles of laissez faire and done very well with the market thank you, rejecting dogmatically anything that smelled of state interference. Nixon's NEP in August 1970 introduced far more Government control into the economy than the New Deal or Kennedy. It was done without prior warning or education or explanation to an initially hostile bourgeoisie and unco-operative trade union movement. However, the robber baron capitalists soon came to heel and indeed are now fully enthusiastic about wage-price controls while the trade unions have not even offered token resistance. There has been no discussion, explanation of the measures since their proclamation, either in Congress - where after all there ought to be the highest level of consideration and discussion of executive action - or in the Press. The classes simply accepted the measures as the Executive's prerogative and worked within them. No doubt if they had been unsuccessful, if there was not a high growth rate and a lessening of inflation, there would have been vocal opposition. But this would have been opposition concerning the incorrectness of the measures, not the Government's right to take them, to interfere in the economy. In Holland and Sweden, where institutionalised incomes policies have existed literally since the war, there is no public airing of the options open before the yearly agreements are made. The process of reaching agreement is clearly delegated to the TU officials and employers with the Government if necessary acting honest broker and the only form dissatisfaction has taken in both countries is strike action (which has been infrequent). There has been no concerted public airing of grievances.

In Britain the first Freeze in the postwar period was carefully explained to the trade unions by the Labour Government as necessary if Britain were to survive in the postwar world. It accompanied the 1949 devaluation of the pound and was accepted by the trade unions both as necessary (the economics of the need for more exports and also dollar paid imports were carefully gone through) and as a gesture of co-operation with a Labour Government that was part of the bargain if the Labour Party were to be able to represent the trade union interest in Parliament. After one year of Freeze, the TUC Conference of Executives refused to support the General Council's recommendation to continue giving support to it. They did this (despite dark hints that Labour defeat the next election would result) on the grounds that trade unionists gained nothing from the freeze and were indeed the losers - there were higher wages to be won and nothing that they could see which would be lost by winning them. Selwyn Lloyd's 1961 Pay Pause is next. NED (National Economic Development Organisation) a tripartite body for the continuing discussion of economic issues dates from this time. However, the pay pause was spectacularly unsuccessful. The trade unions were unprepared to discuss incomes and the National Incomes Commission (seen as the counterpart to NED by the Government) was boycotted by the trade unions and thus still born. (It should not be forgotten by the bureaucratic theorists of history that the TU movement was then in the grips of right-wing traitors like Lord Carron and George Woodcock)

The Labour Government's attempt at Freeze in 1966-9 was also unsuccessful. Hugh Clegg has shown that there had been no thought inside the Labour Cabinet about how to administer an ongoing Incomes Policy, i.e. a Phase 2 and 3. After the statutory Freeze, the Cabinet was pre-occupied with the legal formalities and completely ignored the question of putting it to the country - making it intelligible and agreed. Clegg states that it does not particularly matter what the conscious rationale of an Incomes Policy is, but it must have one. Apart from George Brown's rhetoric, there was nothing. Consequently the trade union leadership had nothing to take to its membership to explain why collective bargaining should not continue as normal, taking from the bosses what they could get.

The current and much-vaunted hostility between the trade unions and the Tory Government derives only in passing from its Tory nature and much more from the working class reaction to the last Labour Government's moves. That Labour Government had relied on the trade union leaders to deliver the working class enthusiastic about progress, technology and planning. Instead the trade union leaders with nothing to explain to the working class and nothing concrete to offer from this New Age except Incomes Policy and In Place of Strife had their knuckles sharply rapped by the working class and support was withdrawn from Labour politics as a result ... until the Labour Party did its own volte-face. The Conservative Government responded to the assertion of working class power begun under the Labour Government by standing up to the challenge where Labour had abdicated. What happened? The Industrial Relations Act was passed but it could not be put into practice. The Miners were conceded a 20% increase as fair and just. And then it undertook the Tripartite talks in an attempt to arrive at a voluntary incomes policy after it had failed in its challenge to the working class.

Precisely because the working class and the trade unions had taken up a stand outside the sphere of Parliamentary Government and mutual concession, the Conservative Government was compelled to go much further than previous postwar Governments in taking the issues to the working class directly. Not only had there to be talks: they had to mean something and be explained step by step to the working class. For five months (since mid-July when after three months of preliminary meetings which were also public and well-reported aims had been agreed) the talks have been front-page news in every paper . Participants have been interviewed and subjected to cross-questioning by rank-and-file militants (Sid Harraway, CP Fords convenor became a hardy television regular) in prime television time. It has not been the "event" of the Talks that is newsworthy (i.e. what they ate for lunch in the breaks or what they looked like) but what they have been discussing. Both the Government and the TUC were under tremendous pressure from the working class to justify their presence at the talks. The result was the TUC stated it could not simply talk about aims, brass tacks were necessary (see October Communist) The Government package deal was presented at the end of September and there followed a public discussion of its points. The Left Trade Union leaders were the most often quoted and interviewed, i.e. listened to. Both Jones and Scanlon refused to hide behind rhetoric or NEDO for what they were doing in Downing Streets They stated clearly that they were negotiating, looking for an agreement which they could recommend to their members. The foreign exchange markets throughout Europe and the US got very worried by these five months of constant airing of the economic ills of Britain. Here life went on as normal and everyone listened. Though IS and the CP shouted about the need for the working class to repudiate its turncoat leaders neither of them organised demonstrations or even protest meetings against the talks. Neither had the guts to put their counter-case to the working class and be judged by it on their case's merits . As for the Labour Party:

"The confusion on the Labour side has been equally fantastic - and instructive ... On the one hand there is a strong, though largely surreptitious, feeling of relief that the talks broke down, for they had always aroused deep suspicions on the Labour side. Suppose, good heavens, they had succeeded! It would have been a coup for the Prime Minister, and it would have undercut the Labour Party' s elaborately negotiated claim to be able to do a deal with the unions where Tory insensitivity was doomed to failure. But worst of all it would have robbed the Opposition of their occupation. If trade union leaders can negotiate amendments to the Fair Rents Act, increases in pensions and the introduction of threshold agreements directly with the Government, where does that leave Mr Wilson? This point was very reasonably elevated to the constitutional stratosphere by Mr Michael Foot in the debate the other night, but the root of the matter is the question of the power and credibility of the Parliamentary Labour Party." (D Watt, FT, 10.11.72) "Contacts between the Labour Party and the TUC at a time when the TUC is talking to a Conservative Government while most union leaders are at the Labour Conference have clearly been delicate for the past weeks, and Mr Healey stressed today that he did 'not propose to tell the TUC how to deploy its case to the Prime Minister.' However, he described the Government's proposals as 'quite unacceptable'"(FT, 6.10,72) "Mr Wilson argued that, although he hoped Mr Heath would be able to reach an agreement with the unions on prices and incomes, he thought the Prime Minister 'cannot and will not take the broader economic and social measures necessary to resolve this crisis'. Only a Labour Government could produce the policies necessary to win the co-operation of the unions ." (FT, 4.10.72) "Trade union MPs from all sections of the Labour Party - left, right and centre - last night gave a rough ride to Mr Victor Feather ... on the subject of wage restraint ...They are said to have expressed the strongest scepticism about the ability of the TUC to 'deliver' on any Chequers agreement involving a fixed figure for maximum wage increases ... The cause of the trouble was apparently Mr Feather's opening speech, giving a broad resume of the course of the Chequers negotiations so far, which was little more informative than the Press reports of the negotiations." (FT, l9.10.72)



The ruling class's reaction to the talks was definitely mixed. This ambivalence was reflected in the FT at its most conscious. Samuel Brittan was certain by 31 August that some form of prices and incomes policy would be in operation by next spring. But he felt it would hardly be from anything so conscious as the tripartite talks: "But I have an obstinate feeling that the immediate trigger will be something depressingly obvious, familiar and superficial - such as a few bad trade figures, or sterling dipping too far below what is regarded at home and abroad as the lowest tolerable limits ..." For Brittan, an Incomes Policy was a necessary tactic - no more no less. However, by October 19th the tripartite talks seemed likely to succeed, unaided by external events through the momentum of their own content and public support. Brittan wrote: "I have myself for a very long time been calling for action on this particular front. Articles on this case before the 1970 election drew attention to the threat which the inflationary explosion presented to full employment, and warned that unless something was done there would both be an inflationary rise in the money supply and a rise in the number out of work ... After Mr Barber's 1971 Budget and again after the miners' victory ..., the case for an incomes freeze and/or statutory control of wage bargains was put forward here ... There is a further, more political, reason for being sympathetic to the "£2 for all" proposals being discussed at Chequers. This is that for the first time since its election, the Government has seized the initiative on this issue (instead of just meeting the working class's challenge in the economic struggle - NS) ... The present proposals may well be an essential step towards preparing public opinion for the statutory freeze or ceiling which is really required." Brittan fears however that Heath may really be serious: "...the most objectionable aspect is summed up in just that sentence of the conference speech, which was widely regarded as the most generous and far-sighted. This was where the Premier spoke of 'an offer to employers and unions to share fully with the Government the benefits and obligations involved in running the national economy.' At first sight nothing could appear more reasonable. But on reflection, is it really the job of the trade unions to restrain wages or of employers' associations to keep down prices? ... their job is to look after the interests of their members ... They cannot represent and police their own members without being unsuccessful at one or both of these tasks; and it would be difficult to invent a better way of transmitting power to militants at shop floor level. The concept of Government as a coalition of officials and producer interest groups is known as the 'Corporate State'. The label is apt to raise temperatures because it was a term with which Fascist Governments played. But of course the 'Corporate State' has no intrinsic connection with racialism or aggressive nationalism ...The 'Corporate State rests on the fallacy that the national interest is the sum of the interests of trade unionists, farmer, employers, shopkeepers and so on ... it ignores the interest that everyone has as a consumer, which is diffused among thousands of products and activities aside from his own particular industry. A producer-orientated society is likely to make its own members worse off, because of their apparent mutual interest in shoring up each other's special interests and restrictive practices ... The first choice of many political economists would be to use market forces, reinforced by monetary and tax policy, together with certain general rules to harmonise individual and social interest. The trouble arises when a general approach of this kind seems, or appears to be inadequate, and specific controls are required. The instinctive reaction of many Conservatives is that if market forces are not enough then industry and the trade union movement should 'control themselves' in consultation with the Government ... lf the Heath proposals were part of a strategy designed to shift opinion prior to a statutory policy, the approach would be understandable. They might well take such a turning, but through event rather than intentions" (FT, 19.10.72)

On 1st November, Brittan was in a genuine quandary. With agreement seeming just around the corner, he reacted not by attempting to incite the bourgeoisie against their turncoat party but by explaining very clearly what was happening:

"There are two possible roles for those whose job it is to follow arguments about the national economy. There is the diplomatic one, of trying to secure agreement, even if this means claiming that black is white or that there is no real difference between the two. The advantage of this approach is that it is directed towards the immediate and the practical. Its disadvantage is that it encourages self-deception and leaves the running to be made by whatever special interest groups can make the most noise. (He here refers to the Government taking negotiations seriously because it is practical - i.e. forced by events. He calls it self-deception because he fears for capitalism, NS) The other approach is to strip away bogus arguments and emphasise unpopular home truths. ...There is a gain in awareness, especially of the long-term implications of popular slogans; but there are occasions when a few white lies may be a small price to pay to prevent society from breaking apart. It is quite impossible to tell in the heat of the moment which set of dangers is the greater; and it is perhaps best to adopt a certain division of labour with Ministers and officials concentrating on the diplomacy and outside students doing at least a little to nail the propagandist half-truths and mis-statements with which we are being bombarded."

Having proceeded with the analysis earlier quoted in this article, he concludes:

"The more militant TUC leaders are at least frank in stating that their main aim is to squeeze still further the return on capital. But they should recognise that this will mean less investment, and that what investment there is will have a highly labour saving character. A better recipe for unemployment would be difficult to imagine. The more serious Marxists are well aware of this (it is after all in Marx); and they undoubtedly hope that this will lead to the State or a Society of communes, taking over the investment from private enterprise. An unfortunate aspect of the distaste for theory by Conservative and Right-Wing Labour leaders is that they are unwilling or unable to state what is wrong with such a prospect or why it is worth putting up with some inequalities and private fortunes to prevent it ... Finally, one of the strongest arguments against a permanent incomes policy is that these profound questions which split up society into warring camps are brought up with each annual wage rise and with each electricity blackout. The best argument for trying to restore a competitive market system is not its own virtues but the contemplation of the alternatives ." (NB "restore" in the last sentence. For Brittan the "monopoly" power of the working class means that the market is rigged)

On the 9th November, after the talks broke down, Brittan heads his column, "Why Mr Heath's Policy Is Right At Last" and states: "The third reason why the breakdown of the CBI-TUC discussions may not be the tragedy so widely assumed is that responsibility for any intervention that may be necessary with market forces has been thrown back on the elected Government and Parliament where it belongs ... If the responsibilities of the Government are to be shared with union leaders in this way, there can be no permanently excluded subjects: and if the experiment had got off the ground sooner or later every major act of policy would have had to be cleared with the TUC and CBI first; and the leaders of these bodies would have powers of initiative greater than Cabinet Ministers ...There are still many battles ahead (against the 'Corporate State' - NS) ." Brittan clearly saw that if the voluntary agreement had succeeded, sooner or later he and his class would have had to start putting up arguments for the maintenance of the capitalist system, and was very relieved when the failure of the talks at least postponed that possibility for as he himself remarked there were precious few arguments about!

On November 7, Joe Rogaly, Brittan's stablemate who writes the "Society Today' column, comments on "The missing element in the new deal":

"The Freeze that has all along been anticipated by practically everyone excepting the Prime Minister is now with us ... but it would be wrong to go on from there to the assumption that all of Britain's economic problems have finally been solved. To approach that happy millenium would require something that has eluded all post-war Governments, and this Government did not even begin to look for until near the end of its second year in office - namely, a new social contract under which Government, employers, and trade unions might come to co-operate whenever the national interest required that they should do so ... what matters is whether any British Government can find the means and the will to work out a long-term solution to the social malaise that is at the heart of our economic problems."

Rogaly suggests more radical action on all the TUC demands as the first step. "It (the Government, NS) has yet to learn that excess profits on properties do not so much need to be curbed as to be seen to be curbed, and that the price of ordinary housing will never be dependent on textbook market conditions in a small over-crowded island. ... There is still time, of course, and if the first stage of Mr Heath's Government has taught us anything it is that, in the end, it is not Prime Ministers or even political parties that make policies in this country, but the inexorable pressure of events. Events have forced this Administration to change its mind on just about everything it promised when it came to power ... For, when it comes down to it, there is no present option other than to hope that the country will be saved from real economic (and hence political) disaster by the constant education and re-education of the present Government. There is still no evidence that Labour could do any better, and a great deal of evidence that it would probably do a whole lot worse ... Events have at last pointed Mr Heath in the direction of seeking the necessary support: we must pray that something now causes him to take the proper strides down that long road."

The difference between the two writers is interesting. Brittan is far more in touch with the economic realities of the situation than Rogaly; but Brittan clearly pulls back from the brink, refuses to look at the longer term except to say that long-term incomes policies have been shown not to work and are indeed pointing in a dangerous direction. Rogaly on the other hand is clearly aware that the long-term problem is what the short term Freeze tactic is all about. However he knows no more about the long term except to describe the new social contract as the "milennium'' and be sure that we will arrive at it only through "the pressure of events"... to "pray" and trust to objective reality to do the rest. As always, the FT leaders throughout the five months have not taken up any consistent position except to point out the consistent realities as Heath has acted on them e.g. the pitfall in a voluntary policy being the TUC's ability to deliver its "end of the bargain". Brittan's comment re Tory instinct about control being self-control by the working class is interesting from the [point of view of the? - PB] article in the November Communist, The British Road to Socialism



The talks failed and the people who seemed most depressed and dispirited were the CBI. Unlike S.Brittan, they have looked at the long-term and are willing to incur the risks ... they have no choice. The talks failed not because any of the three participants were deceitful or dishonest; but because society itself - and that means the working class - was unwilling to embark on the necessary changes to implement such a policy i.e. giving up collective bargaining as it is done today and moving towards a more conscious division of the working class's product. The CBI could afford to be detached and unworried about gaining its members' adherence to any agreement because it knew full well that if the working class backed a voluntary agreement, its members would have to fall into line, they would have no other option open to them. Thus, it was the CBI and not the Government that has played the honest broker right from the talks very beginning back in January when the CBI invited the TUC to a discussion. Michael Clapham, CBI President, pointed out on 27 September that the Government's package deal "might" make CBI members think "that industry was being asked to make an 'undue sacrifice after holding down prices for the past 15 months ... they might doubt whether the whole package allowed for a growth of profits adequate to sustain the 5% growth in the economy on which the Government's proposals were predicated ... The proposals are a rational attempt to divide up between producer, consumer and employee the addition to national wealth that we can reasonably expect,' Mr Clapham said. 'The proposals call on all three parties to accept a new social contract in which the contribution of each is dependent on the contribution of the others (i.e. make conscious and thus capable of discussion and change the existing relations of production, NS).'" (FT, 28.9.2) Even though industry was making the greater sacrifice, it was worth it, 'we shall indeed have achieved something which for years has been as elusive as it has been desirable' (ibid). The CBI recognised that the only way to deal with wage claims was to explain to the working class why the claims were unrealistic; it did not have the power to resist paying them. There is simply no other reason why the CBI should have initiated the talks. If it had had the power to maintain its profit rates without the talks, it would certainly have asserted it and done so.

What about the TUC? "It's (policing wage restraint) not what they (TUC) are paid to do. They are elected to do the best they can for their members, and if they fail in that task they are liable to be replaced by other, more militant, men. (That certainly, was one of the results of the unions' willing co-operation with the last Labour Government during a period of acute economic crisis)." (Observer leader, 5.11.72) "... there is no doubt a still, small voice in Mr Feather's ear which is saying the same sort of thing as the militants are shouting outside - namely that the unions have no business to be conducting this kind of detailed negotiation. They are not equipped for it, they cannot deliver their side of the 'bargain' even if they wanted to, and they are running the risk of a humiliating debacle ." (D.Watt, FT, 10.11.72) It is simply a truism to state that the trade union leaders could not police an incomes policy because that is not their job and they would be replaced by militants if they tried. This is only true if the leaders do not actively explain what an incomes policy can give and what it cannot and also what makes it necessary. If the working class sees that the militants are wrong, it will not support them; i.e. if it sees that it cannot consume all of its product and that bosses cannot be expected to produce wage rises at the expense of reproduction and accumulation. And that in return for conscious self-regulation of wages, the bosses and the state have conceded a direct voice in how surplus value is parcelled out.

The problem for the working class then becomes to see that

(l) its % consumption is maintained and its level of consumption increased as growth continues

(2) to work out its demands for how the surplus value should be parcelled out. The guarantees that the Government and employers will cough up follow very simply after this: if they don't there is organised opposition. And in Britain, organised opposition by the working class works: i.e. the IR Act and the Miners' Strike. Far from the talks being a Tory ploy or charade, they become those things only because the working class does not actively participate and refuses to take what the ruling class are saying at its face value and test the veracity of the ruling class in practice. It of course follows that trade union leaders will be replaced by 'militants' if those leaders never fight the militants on the basis of whose view of reality is correct. The tripartite talks definitely implied a change in the role of trade unions because they implied a change in the action of the working class itself in the economic struggle. The trade union leaders would not have to worry about being replaced if the working class itself changed its views on the economic struggle. But the working class was never given a chance to do so despite all the efforts of the ruling class to use the tripartite talks to shake things up and publicly examine the facts. Not once during the five months of talks, did a trade union leader dare to address a working class meeting about the talks and what they meant for the working class. They dared not face up to their rank and file, and deal with the left's arguments. It is small wonder that the ruling class remained sceptical about the TUC's ability to deliver a voluntary agreement. They never really tried. IS and the CP had nothing to fear when they cried out against all the opinion polls in favour that a voluntary agreement "shall not pass".

The proof of the above is to be seen in World War II where the working class accepted a cessation of normal collective bargaining when they saw good reason for doing so: i.e. to win the war. The TUC negotiations at Downing Street were united (from right winger Sidney Green to lefties Scanlon/Jones) in finding the Government's package deal on 2nd November unacceptable. Why? They could never sell it to their members. So much yet again for the bureaucracy theory of history. £2.60 was an impossibly low figure (yet it was based on 5% growth rate which is higher than any time since the war, i.e. Britain has yet to manage it). The Government asked the TUC to present it with alternative sets of statistics showing a higher growth rate and therefore a bigger wage increase possible. The TUC did not do so. The TUC stated the flat-rate increase was wrong as it ate into correct and just differentials based on skill etc. The Government asked how else the lower-paid were to be better paid. The TUC did not answer. Nor on those issues like the Rents Act, food prices, the IR Act, property, which were obviously negotiable and expected to be negotiated, did the TUC seek to play its hand: i.e. assert working class power. A demonstration organised by the TUC in favour of these things just prior to the November talks would have increased the pressure on the Government to deliver immeasurably. If the TUC did not wield its power in the negotiations, it must be that it did not really take them seriously. Instead Jones and Scanlon tried to imagine what it would be like being Mrs Smith confronted with your husband's wage freeze and a shop where prices have gone up.

What about the Government? The Heath Government had not faced what Sameul Brittan had: a voluntary agreement on the Heath lines would indeed lessen Parliament's power. Not because the agreement would have taken away any of Parliament's traditional business so much as that it would create a new centre for bargaining between the classes, a centre much closer to the actual production process and therefore much more responsive to their needs, demands etc and much more capable of regulating the classes within the market. Given such an alternative centre of power, decisions which Parliament at present takes would "naturally" move over to be taken by the new tripartite body since it would be in fact reflecting economic reality more accurately. This explains why on the last day of the talks Heath announced that certain topics were not negotiable because they were for Parliament only (e.g. the Rents Act). He had waited until the last moment to say this because it genuinely had not occurred to him before. As Rogaly pointed out, the Government was impelled by events. First, to make the offer of a new social contract. And then, when during the discussions the Government got some inkling of what the new social contract would mean to present, normal politics (i.e. as great a change as to normal collective bargaining) it too pulled back, like the TUC, from explaining the change to its constituents, the electorate and the Tory party.

One thing is clear. No Government can give rise to such a "new social contract" in Britain. Such a development requires the active and conscious consent of both classes. It requires the alteration of present collective bargaining and politics and a development of the working class's understanding of its own function and power within capitalism. This becomes obvious when we read first that "But the exercise (tripartite talks) had to be gone through in order to expose the issues to the, nation." (Sunday Times, Ronald Butt, 5.11.72) Even though "The main purpose of wage control should be to give a short sharp shock to inflationary expectations so that orthodox monetary and physical restraints can be used without putting unemployment above a million again ... they (the Heath proposals and tripartite talks, NS) have given away so much in an attempt to buy the support of the TUC and the media that what is left is neither short, sharp, nor much of a shock." (S.Brittan, FT, 1.11.72) Dirigisme and rule by bureaucratic fiat is simply impossible in Britain. Measures have to be explained and agreed voluntarily.

Though the talks broke down, the Government is enacting all the concessions that it promised the TUC in its package deal. A form of agreement was reached in fact, though neither the Government nor the TUC will put themselves in a strong enough position vis a vis the working class (i.e. to explain the underlying issues) to state that. It is hoped that the Freeze will not be challenged by the working class. But what happens next? "One's instinct is naturally to suppose that after the failure of one set of assumptions (voluntary agreement is desirable, NS), everyone concerned will now move to the opposite extreme - the Government towards statutory compulsion, the trade unions to disengagement and the Labour Party to a closer and closer harmony with the unions. But ... the situation is far more fluid than that. The parties concerned (and that includes the CBI) genuinely do not know what to do for the best. In a way this is a depressing prospect but in another it represents a real opportunity. Attitudes may harden very fast from now on but for a month or two the Government has the chance to follow up the initiative. The only proviso is that it should clear its collective mind - and fast." (DWatt, FT, 10.11.72)

Given the historical structure of British politics, it is impossible for the Tory Party to enact any measure of real reform unless there is working class pressure, hard pressure, from without for that reform. In the past that pressure has always been expressed through Parliament. Now that there are no more democratic measures that can be enacted to bring greater political democracy, the only reforms left are economic ones: a greater measure of conscious working class control over production and the distribution of its surplus value. The Labour Party will not push those reforms unless it is pushed by the trade unions or a well organised pressure group such as the Anti-Corn Law League was to the Liberals. The trade unions have no heart for completely altering their way of existence; for shaking up the processes of collective bargaining; the left are more concerned to preserve pure and unsullied by bourgeois molesters the sacred heart of the working class. The Conservative Government in this situation are powerless. The motive force for their measures as Rogaly accurately observes has always come from the pressure of events. Far from Britain lacking theorists of the right, her real lack is theorists of the left who are more interested in advancing towards socialism than in preserving the working class's tradition. This problem will be with Britain and indeed Europe for some time and so we will have occasion to re-examine it again when the pressure of economic reality throws it up.

Postscript: Brittan's lament on the corporate state ignoring and trampling the interests of the consumer is instructive: conscious control by the producers of commodities means that their use-values and not exchange-values can become of primary importance when (a) the level of consumption of the working class and (b) the reproduction and accumulation of a society are both guaranteed. The problem then becomes one of producing for use. Brittan has thus to become a market socialist and use market socialist arguments. Why? He is faced with a move towards socialism.

Nina Stead