Industrial Relations and Democracy
[Reprinted from Land & Liberty,
Everyone agrees that there is something radically wrong with
industrial relations in modern Britain. An enormous amount of effort
is expended doing things which are neither pleasant nor productive.
The disparity of rewards which accrue to different people does not
correspond with anybody's idea of justice.
Right at the centre is the question of trade unions: their relations
with the community at large; with their own members, and with each
other. These problems have vexed all thinkers for the last century and
a half. All political parties have attempted in one way or another to
deal with them; nobody would today suggest that any of the past "solutions"
is adequate for modern needs. And there is little sign that any
political party is ready to offer the electorate, at the next General
Election, any new solution with either confidence or unanimity.
FLAWS IN THE CRYSTAL BALL
It is appropriate that two new and important books bearing on the
subject have recently appeared. John Elliott's book is an
individualistic study, whose importance is suggested by the
commendatory preface by Lord Bullock. The Institute of Economic
Affairs has published a collection of papers covering a wide field, to
which several economists, headed by Lord Robbins, have contributed.
The first of these two works is of particular value for its
description of the very complex legal, social and political history of
industrial relations in the last couple of decades; the second work as
a source for many interesting ideas about the present and future role
of trade unions.
Whether we like it or not, this country has a continuity in its
industrial history which has few parallels elsewhere in the world. In
Europe, for example, the wars and revolutions of the 20th century have
repeatedly compelled people to remould all social institutions from
their very foundations. Britain has had no such experience. Industrial
structures, both of management and of labour, have been gradually
modified; but attitudes, interests and hierarchies have been preserved
long after the conditions which originally brought them into existence
If we must pick up a specific idea which is likely to influence
political action in the next Parliament, whatever its composition,
then that idea is surely "industrial democracy" -- the
notion that control and perhaps ownership, of a firm, should pass
partially or wholly into the hands of those who work in it. This is
the central theme of John Elliott's book, and an important topic in
the IEA symposium. Trade unions, governments and voters will all need
to give the matter much thought.
Like many ideas, "industrial democracy" has deep roots, and
it cuts right across existing political attitudes. People may come to
support "industrial democracy" because they see it as a step
towards syndicalism, or because they consider it the best way of
stabilising "capitalism." As John Elliott points out,
worker-cooperative systems have developed in countries starting from
utterly dissimilar philosophical bases -- "communist"
Yugoslavia, "capitalist" America, "social-democratic"
Scandinavia; Israel is surely a society
Conversely, "industrial democracy" will be opposed by the
old-fashioned type of owner or manager who denies that workers possess
the capacity or responsibility for controlling their firms; by trade
unionists who think that management is the job of the boss and not
wish to rethink their industrial role; by revolutionary socialists who
see "industrial democracy" as the last-ditch stand of
capitalism; and -- perhaps most important of all -- by sceptical or
In a truly free economy, with free trade and free land, there would be
no need to bring this question of "industrial democracy"
into the political field at all. The issue would be decided on in each
separate firm by the operation of market forces, and no action by any
government would be required. On this question, as on so many others,
we must deplore the circumstances which have demanded that governments
should blunder into this delicate situation with legislation which
will almost certainly produce unwanted side-effects, and may well be
J. G. Morell's attempt to evaluate the Long Term Prospects
for the UK Property Market* is rendered useless by the
superficiality of his working assumptions.
Noting slow economic growth and trends such as the slow fall in
population growth, Morrell -- Director of the Henley Centre for
Forecasting -- concludes that "land prices may rise more
moderately in future in relation to other prices." He
ignores the way land values can -- and indeed are -- being
forced up by political decisions.
The under-use of labour and capital is due to a shortage of
effective demand, says Morrell, but the world political and
economic system cannot take action, "the main inhibiting
factor being fear of rekindling inflation." Surely it does
not take a genius to see that if there is surplus labour and
capital ready, waiting and able to engage in productive
activity, the only inhibiting factor must be constraints on the
third partner in production -- land?
* Sr. Quintin Son & Stanley, London, 1978.
- J. Elliott, Conflict or Cooperation: the growth of industrial
democracy, Kegan Paul, £8.95 hard covers, £4.95 paper.
- Trade Unions: public goods or public "bads"? IEA
Reading 17: £2. 7