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WHY CHANGE IS UNDER CONSIDERATION

The working class showed its will to the first part of the change by engaging in actions like the U[pper] C[lyde] S[hipbuilding] work-in and organising very powerful and vocal lobbies to oppose the B[ritish] S[teel] C[orporation]'s plans to phase out large portions of the existing steel plant. It showed itself most interested in having an acknowledged right in decisions about redundancy; about whether specific jobs would be continued or axed. It is therefore likely that legal sharing of power over the firm with its workers will be in this area. This will necessarily give rise to the workers having to consider why management believe the redundancy necessary; whether production can continue profitably given the present relations of production; the level of means of production per worker; whether these conditions of production can be altered while still salvaging the jobs; whether "public money" can be found to subsidise production.

The second part of the change has emerged from political pressure about the social effects of profitable products produced for exchange. The substance of the pressure has been that use-value should outweigh exchange value in deciding what is produced; and that the "community" or "nation" should decide what constitutes a socially necessary value. Those involved have been the "environmentalist" lobby - a disparate collection indeed of pressure groups, from those seeking to preserve Britain' s few remaining "rural" villages through to Transport 2000 which is attempting to enforce regulation of the unbridled individualism of the motor car within an objective limitation of limited physical area and pollution. The existence of this kind of pressure is also seen in the surprisingly quick joining of battle and resolution of the thalidomide controversy. Distillers capitulated to political pressure and conceded compensation far in excess of the conventional legal restitution. The Financial Times commented after the settlement that there was a clear case for altering the law in accordance with a newly expressed wish by the nation for a limitation of the freedom of firms.

An underlying cause which has made the change necessary was something which Watkinson did not mention. That is that the shareholders of firms have not been wielding their formal legal power and that the managers have become too much of a "law unto themselves" and who therefore require a constituency who will wield that legal power. The Financial Times article on the Lonrho affair on June [1?]st stated: 

"The most important function of a board of directors is to appoint, monitor and where necessary dismiss the chief executive of the company ... Very few boards of British companies perform their proper function - for two main reasons. One is that the offices of chairman of the board and chief executive are frequently held by one man. Where the same man is both chairman and chief executive the board of directors is often effectively his creature; such boards, unless they contain some unusually strong-willed and determined non-executive directors, cannot adequately monitor the chief executive's performance. The other reason is that too many boards are staffed wholly or largely by executive directors whose jobs depend on the favour of the chief executive and who are unlikely to rock the boat by questioning his competence." 

The Chairman of the Board of Governors of the Bank of England (Leslie O'Brien) took a very untypical initiative in proposing the establishment of an institutional investors (insurance companies, pension funds, unit trusts) [working party? - PB] because, he states, these numerically significant shareholders were not exercising their power as shareholders and the sole legal arbiters of the destiny of firms sufficiently to ensure a healthy capitalism. British management had had only the constraint of the market and in too many cases the management were proving unable to deal with this constraint (Rolls Royce, the Mersey docks). The FT article on Lonrho concludes: 

"business has to operate in a more open and more critical environment than it was used to in the past. Whether the issue concerns African wages or salaries in the Cayman Islands, businessmen must work on the assumption that even the most closely guarded secrets will one day be exposed to public gaze." 

This is an echo of Lord Watkinson's assessment of a will to change: the change has been occurring in substance within the institutions of political life of the nation and that change should now be formalised in the legal and social practice of firms. (German and French legal and social practice mean that managers are overseen by in Germany the banks and in France the state.)

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