Capital & Class. - 1985 - 1986. - Issue 27 issue 27

Phillip Garrahan

3 Nissan in the north east of England

s MU

CO

• In recent years, Japanese investment has spearheaded attempts by the state to modernise British industry through attracting international capital to very deprived regions . Philip Garrahan shows that investment by Nissan in Japan and the us is based on an attack against independent trade unionism . The effect of Nissan's new plant in the north east is likely to further drive down wages of a more docile labour force . As such, Nissan and Co . accompany the policing and legal instruments of the state's anti-union policies . Job gains are likely to be minimal because Nissan's investment will probably be at the expense of other car companies' production and because research and development is carried on abroad . Garrahan proposes that the Nissan plant be closely monitored to prevent the Nissan style of management from infecting other industries and sectors.

5

Capital & Class 6

BY MID-1986 the first Nissan cars made in Britain will be assembled from kits at the company's new factory in the north east of England . The factory is on the site of Sunderland airport, formerly RAF Usworth and more recently home to private flying and

parachuting clubs . This site is now the location for a massive inward investment to establish the North East as a car manufacturing centre in the UK and European economies . The choice of this site reflects the imperatives of a transnational company seeking to expand its global market share of the car industry, so drawing our attention to an example of the local effects of the process of the internationalisation of capital . The development of the Sunderland site raises major questions about the likely economic consequences in the North East as a region, and in the rest of the British car and components industry . It also serves to focus critical attention on the Thatcher government's deeply-rooted anti-union policy which is so supportive of the Nissan company approach to labour/ management relations . We are experiencing a phase in which capital is securing the restructuring of industrial and manufacturing activity with active government and wider political encouragement, and the Nissan development ought above all to be regarded as symptomatic of this . The airport site is situated on the edge of Washington New Town in the Borough of Sunderland . The industrial development potential of the site had been recognised for some time as it was one of the few green-field sites large enough in the county of Tyne and Wear to attract a significant manufacturing investment . In the 1960s there had been speculation about the need to

attract something like a major car manufacturer to the region to offset the decline in traditional mining, heavy engineering and shipbuilding industries . In the early 1970s the site was shown to a number of investors for industrial development purposes, but none pursued the opportunity and this mirrored the general trend for companies to pull out of the North East on a permanent basis . Even before the oil crisis and recession of the mid-1970s, the North East's reputation for high unemployment was well known . Against the background of catastrophic levels of unemployment in 1985 - over 50% of men in inner areas of Sunderland and up to 25% of men in Washington are out of work - the Nissan development offers some hope of jobs . But even if it does provide jobs, why did Nissan decide upon the UK, and what further problems are raised for a socialist economic policy which is sensitive to the special needs and demands of deprived regions?

Nissan and the UK Nissan's decision to build a major car plant in the UK had been preceded in 1980 by a bid, thwarted by Norman Tebbitt, to buy the British Leyland site and factory in Belgium . Since then Nissan has purchased a controlling interest in Motor Iberica, a Spanish firm making light trucks and vans, and additionally has engaged in a collaborative venture with Alfa Romeo of Italy . The latter agreement involves each partner assembling and selling the other's products in its home market, so for example a small Nissan car will be produced by Alfa Romeo assembly lines from kits and marketed under the Nissan badge in Alfa's showrooms .

Nissan The Volkswagen Santana model is being made at the Nissan factory in Zama in Japan, but there is no reciprocal agreement as yet which involves vw selling Nissan cars in Europe . Diversification has led Nissan into the manufacture of forklift-trucks, industrial engines, solid-fuel rocket launch vehicles, textile machinery, marine engines, and small leisure boats, but it is in the production of motor cars that most of Nissan's 26 companies in 22 countries are involved . Nissan comes second only to Toyota in the large Japanese domestic market and is the largest vehicle world's fourth manufacturer . As with other large multinational companies, Nissan has ventured into collaboration with foreign companies in order to maintain its market position in the face of the expected concentration of production arising from recession and heightened competitiveness . British Leyland and Honda have an established collaboration agreement, and some form of deal has been rumoured between Ford and Fiat . In Nissan's case, however, this process of internationalising capital has recently gone further with significant investment by the company in green-field sites for full-scale assembly and manufacturing plants . The Nissan plants in Smyrna in Tennessee and Washington near Sunderland open the door to the vast American and European markets and highlight the company's strategy of overseas expansion in order to overcome protectionist barriers against Japanese imports .

Anti-union policies Once it became known that Nissan was intending to open a Europeanbased car plant, it came as no surprise

that the company chose the UK since this country is Nissan's major export market in Europe . Since the informal agreement came into effect limiting Japanese imported cars to Britain to about 12% of total annual sales, Nissan has continued to sell 6% of the total so beating the combined UK sales of Toyota, Honda, Mazda, and Colt cars . As Nissan's own public relations material declares, `Continued trade restrictions in Europe had severely restricted the growth in sales of Nissan vehicles and it had become commercially viable to establish manufacturing facilities within the EEC . Britain, as Nissan's largest market in Europe, was the obvious choice and after much deliberation the Washington site was selected as the most appropriate .' There was little doubt about the reasons for the Nissan decision to invest in Britain and Mrs Thatcher's government was openly enthusiastic . While in opposition Mrs Thatcher had visited Japan and had approached Nissan, among others, to convey her willingness to support Japanese firms opening up production in Britain . These overtures were continued in 1982 (after Nissan's decision to enter Europe was known, but before the UK had been finally settled on) when Mrs Thatcher on a visit to Japan initiated an interview with the Nissan company president and left a lasting impression of her commitment and enthusiasm . The Tory government's determination to crush trade union activism in the domestic British car industry was clearly apparent by 1982 and Mrs Thatcher's interview with Nissan executives in Japan, at her own invitation, was part of that anti-union strategy . If Britain's own nationalised car industry could not produce cars at a

7

Capital & Class 8

profit without the troublesome intervention of the unions, then the Tory philosophy looked to a foreign manufacturer with a reputation for crushing organised labour on the road to maximising profitability . Nissan's connections with the UK go back to just after the end of the Second World War when the occupation forces allowed Nissan to restart manufacturing cars . During the war the company had been involved in production which was geared to the needs of the armed forces for military transport vehicles . But in the early 1950s Nissan design and production workers were sent to Austin Motors of England to gain experience and gather expertise and, as part of the deal, Nissan was licenced between 19521959 to produce the Austin Cambridge car in Japan . Nissan officials now talk warmly of the soft spot in their hearts for the Austin people who helped their company in its early postwar development . However, this help did nothing for the shopfloor worker . In fact, the introduction of the assembly-line production process brought from Austin was the occasion for a major company assault on the right of the workforce to be collectively represented by an independent union . This took the form of a lock-out in 1953 after a strike had begun over the new technologies . It ended in the union's defeat and Nissan's management created a company union . These events at Nissan were typical of other experiences in Japanese industry in the 1950s when management, with strong state support, sought to achieve a dominant position over the workforce .' The resulting Japanese model of labour/ management relations is one in which independent trade unionism largely

ceases to exist and it is clearly upon this aspect of the Nissan development that the Tory government's main interest is to be focussed . Investment phases

The reciprocal agreement, signed with Austin Motors in the 1950s, is very different from the deal which was recently struck between Nissan and the British government . According to the official line, the Nissan plant near Washington is being constructed in two phases . The first of these barely justifies the initial £50m investment by Nissan and company executives privately admit that phase two will follow with certainty, taking the total cost up to £350m . The difference between the first and second phases of the development is that production will move from kits to a full assembly line process . The `formal' announcement that this is going ahead will be made in 1987, no doubt with much trumpeting about the cooperation received from the workers and the car components industry . The UK government grants were negotiated with the Department of Trade and Industry and come under the old scheme for Regional Development Grants at 22% of costs and Selective Financial Assistance at nearly 12% of cost . Under the agreement, the Nissan development will work towards a 60-80% `local' content, with `local' understood to mean `produced within the EEC' . Until this level is reached Nissan will not be able to net off any Washington-produced vehicles from their import ceiling and nor will it be able to claim any of the 11 .72% Selective Financial Assistance . The alleged advantages to the UK's domestic car components industry recede when it is

Nissan 9 Nissan Motor Manufacturing

Phase 1

Start date mid-1986

Phase 2

1990

(UK)

Limited

Size of workforce 470

No. of cars 24,000

2,700

100,000

understood that `local' is a redefined term under EEC regulations, and the position worsens if Japanese car components firms open plants within the EEC and become `local' by 1990 when phase two is due to begin . As yet, there is only an unofficial reference to a third phase of the development which, if it goes ahead, will change the face of the British car industry . The plant being constructed near Washington has the same maximum output as that in Smyrna, Tennessee, of up to 200,000 units and to put this into context it need only be pointed out that the domestic British car industry is currently only making about 750,000 cars per year . The implications of the Nissan development may not yet be fully clear, but the repercussions of setting the company up in the UK will be felt for many years ahead . British Leyland's share of the home market has fallen in the last decade from a third to under one-fifth and even this is put at risk by the time Nissan's second phase develops . With the coming of the rumoured third phase there will undoubtedly be a comparable threat to the share of the UK market now held by either Ford or Vauxhall, both wholly owned subsidiaries of American corporations . If the existing British-based manufacturers do not find export markets as a substitute, and in the absence of any miraculous recovery of

Total cost

Total UK govt grants

c . £350m

c . £lOlm

the UK economy in the next decade, any success for Nissan can only be at the expense of British Leyland initially . Subsequently the Nissan investment could be a major factor in the corporate decision by one of the two big us-owned producers to pull out of Britain . Technology The Nissan development may also be representative of turning the British car industry into one that is concerned with low technology, low skills, and hence low pay . The two main high skill/ high technology areas in car manufacture will not involve any new developments at Washington : the power-train consisting of the engine and gearbox will continue to be imported by Nissan from Japan, and the company has no plans to locate any research and design activities at its north eastern plant . In order to reconcile the importing of the power-train with the commitment to move up to 80% `local' content, Nissan will be allowed to engage in creative accounting . The company will regard anything from paying rates on the factory to having windows cleaned as part and parcel of that which is `local' in the total cost of producing each car . The first car to be produced by Nissan in the UK is the Stanza, a direct competitor to the Ford Sierra, Austin Montego, and Vauxhall Cavalier for

Capital & Class 10

the profitable fleet market . Since the Stanza was designed in Japan and research and design on its successor will also take place abroad, there will be no `high-tech spin-offs' for the North East . Despite these facts, the Nissan development has been welcomed in the North East with wildly exaggerated claims as to its effect on jobs . The Chief Executive of Tyne and Wear County Council is on record as predicting that there will be 8-10,000 jobs created in the area as a result of the Nissan factory opening up its second phase, and the local media have variously described Nissan's coming as bringing a `jobs bonanza' and being `potentially the most nutritious fruit to ripen in this region since someone decided to launch a ship into the river Tyne' . Understanding the consequences The left in Britain ought to have little hesitation in analysing the meaning of the Nissan development in the North East, although the formulation of a convincing response will be typically problematical . In the past, the approach to regional policies has been supported by a consensus in the labour movement which paid tribute to the ability of the private sector to put the regional imbalance right with generous help from the state's funds . The 2,700 jobs to be created by Nissan do not come cheap at over £100m . But the true cost per new job will only become apparent should the displacement factors described above materialise . Should British Leyland and/or other existing manufacturers be forced to declare redundancies because they cannot compete with Nissan cars made in Britain, then the social cost of these redundancies will have to be met just

as the cost of the grants is met from state funds . Socialist critics of these traditional regional aid policies find it very hard to go public with their criticisms, especially if the net new jobs come to their own region . In the North East it does not go down well with an audience of unemployed to reflect on the long-term effects on the rest of the car industry and on the British economy, but a start will have to be made . An alternative view of regional policy has been initiated in the North East in `Regionalism or Socialism : taking control of the North's economy', 3 but this debate is still only conducted in narrow circles . An essential ingredient in building support for an alternative policy consists in coming to terms with why members of the labour movement and of the wider public have failed to understand the real issues at stake in the Nissan development . Behind the regional viewpoint that asks why not give state funds to Nissan for jobs in the North East if public money can go into nationalised industry like British Leyland in the Midlands and elsewhere, there also lies a belief that working for Nissan will be no different from working for any other mass car maker . This should be a first point of debate for socialists wishing to point to the dilemmas of traditional regional policy . Working for Nissan will be different and Thatcher has encouraged the project all along for precisely this reason . The AUEW, as the single union in the Nissan plant, has agreed to a disputes procedure which will effectively disbar it from operating in the collective defence of the workforce . All grievances must initially be dealt with via the company's own `in-house' machinery which is fashioned, in the

Nissan

AUEW's own words,' . . . to provide the

utmost encouragement and assistance to employees for the resolution of problems and grievances at domestic level, which is the best place for them to be resolved .' This new-found confidence in the fundamentally conflictfree nature of labour/management relations under Nissan is reinforced by the agreement to refer unsettled grievances to ACAS, normally for conciliation since ` . . . it is recognised that such issues may not always be appropriate for arbitration .' Instead of the Joint Works Council which is more usual in the car industry, the agreement provides for a Company Council which ` . . . will in itself greatly contribute to the concept of harmonious relationships between management and the employees .' 4 In effect, the AUEW has traded its independence during a period of high unemployment and declining union membership, but what may be good for the union's future in this example does not augur well for the protection of the workforce . In justifying the case for single union representation, Nissan's director of personnel cites the common terms and conditions of employment offered to employees and the flexibility of working practices that will be demanded of them . 5 Preliminary discussions were held with three unions, the AUEW, T&G and GMs, and they are all said by Nissan to have accepted the principle of a single union . Taken by itself, this measure, like those of making all employees use the same canteen or having the equal annual leave, does not constitute a necessary threat to workers' interests . It is when the various elements are seen in the context of a determined company attempt to achieve total control of the shopfloor

that the reason for enfeebling the trade union becomes apparent . In broad terms the agreement made between the company and the AUEW commits the union to complicity in any future changes in working practices and technology, without reserving its traditional right and obligation, as a union, to speak separately for the workforce about implications for working conditions and job security which such changes might carry . While the agreement does not directly address a nostrike option, it effectively rules out industrial action by determining that first, all disputes will be referred to the Company Council, and second, that as an exception a dispute may be referred to ACAS for conciliation . Thirdly, if ACAS conciliation fails, then disputes will go to final and binding arbitration . No official industrial action is provided for under the agreement during these three stages of negotiation, conciliation, and arbitration . Indeed arbitration is deliberately ruled out so that unofficial action will be the only available recourse . It would be fair to say at the present moment that the company is making every effort to predict a loyal body of employees who would find unofficial action unthinkable . These are not idle words, since Nissan has already sent a high proportion of those who have just been appointed to managerial and supervisory jobs to Japan for induction into the company's attitude to its `family' of employees . The bulk of the 2,000-plus shopfloor workers will be appointed by early 1986, but not before all applicants have gone through rigorous testing, a part of which will be to identify those unsuitable for employment because of their trade union affiliations or sympathies . It is this process of sieving through

11

Capital & Class

12

applicants to separate those most amenable to Nissan's employment policy which bears immediate comparison with the experience at the Smyrna, Tennessee plant . Like the north east of England, Tennessee had no prior experience of the modern car industry, but the site chosen at Smyrna near Nashville attracted 130,000 applications for the 2,000 available jobs . Since production started there in mid-1983, the darker side of Nissan's family style of management has begun to emerge as authoritarian and demanding of the utmost obedience of employees in the service of the assembly line . Of course, southern states like Tennessee have no surviving trade union tradition, but the $63m spent on `training' those successful applicants served the purpose of eliminating anyone unsuited to a group consciousness or orientated to teamwork with compliant attitudes towards management . The well-publicised worker enthusiasm for the company is not spontaneous, but it is coerced since loyalty is a factor in determining earnings, with different pay received for the same job by different workers . Some $7m of the bill for pre-screening and training of workers at the Smyrna plant was met by the State of Tennessee and it remains to be seen whether this corporate spirit is fully reproduced in the North East . If it is, then the local state will have been actively consorting with the company, like Tennessee, to minimise the effectiveness of trade union representation at the shopfloor bargaining level . Of course, a company union is tolerated by Nissan in Japan, whereas it is not in Tennessee, but in the last thirty years there have been only a handful of instances in which ordinary workers have dared tarnish

their company loyalism and jeopardise their job security by standing against union nominees in shopfloor elections . Almost invariably, then, there are no candidates other than those with formal support from the company union . They are elected by an almost unanimous vote, and are frequently of the trainee management, spending time as officials of the company union in order to enhance their career prospects within the company . Under these circumstances in Japan the company can render overtime mandatory at its discretion ; can insist that tools and spare parts are laid out in employees' own time before the assembly line starts ; and can virtually eliminate the need for relief workers since unexpected leave and occasional absences are deterred by the oppressive climate of working conditions . Within the working team which is so favoured by Nissan's group philosophy, the effect of peer pressure is to sustain results and place performance over individual failure, whether through sickness or injury . The real result of working for Nissan in the North East is that working conditions and the defence of workers' rights suffer and are set back, and it is the need to inject this analysis into the wider public debate which is so urgent for the left at the moment .

Conclusion A testing period is therefore in store when the Nissan factory near Washington shortly gears up for production . While all of the circumstances mentioned above will not at once come about in the new plant, there is no doubting the responsibility which the left carries for openly attacking the new realism in industrial relations

Nissan

which Nissan is spearheading . The company's hiring policy will have to be monitored so that there is public appreciation of its partialities . There will also be room for analysing the overall advantages which the company gains over labour from its management practices: flexible working time, simplified job descriptions, new demarcations, and an emphasis on behavioural qualities may all render the production process more cost-effective, but they will not lead to higher rates of pay . Comparisons with the rest of the British car industry will be instructive here, as will close attention to other companies - Japanese or not - which are characteristic of the ideological shift in industrial relations . While older established companies will not be expected to change to the new practices symbolised by Nissan, we can expect to hear much more of the 'infectious' effect of the Japanese style . Our task will be to expose this, and not

job creation by itself, as the main rationale for the feverish support given to the Nissan project .

Notes I. For a review of this see Philip Armstrong, Andrew Glyn and John Harrison, Capitalism Since World War II (Fontana Paperbacks : 1984) . 2. The local state refuses to divulge aid given in the purchase of land at the airport, so the overall bill may be higher still . 3. Available from Days of Hope Bookshop, 115 Westgage Road, Newcastle . 4. Press release from the Amalgamated Union of Engineering Workers, 23 April 1985, announcing the signing of the single union agreement with Nissan . 5. From a speech made at the announcement of the agreement with the AUEW. For a fuller discussion of these working practices see Mike George and Hugo Levie, Japanese Competition and the British Workplace (North London Polytechnic, Centre for Alternative Industrial and Technological Systems : 1984) .

13

Mark Goodwin and Simon Duncan

The local state and local economic policy : political mobilisation or economic regeneration

14

The authors review the issues underlying recent local initiatives in economic policy in the context of attempts to construct local strategies in opposition to the central economic and political structures of contemporary British capitalism . They differentiate between traditional industrial development policies designed to `service capital' and the radical local economic policies which are aimed at `restructuring for labour' . By analysing Sheffield City Council's employment creation policies between 1981-1984 they illustrate the constraints which limit the effectiveness of such initiatives in purely job creation terms, while arguing that success should be measured more widely in terms of political mobilisation . Sheffield's experience is contrasted with the London Docklands Development Project which also has political implications in terms of restructuring the social, political and class composition of the locality, and at the same time serves as a prototype of the entrepreneurial ideology of the government .

Local State Issues and context Over the past four or five years a number of Labour-controlled local authorities have introduced a series of new policy initiatives, designed to develop local political strategies as well as to provide services and support to those previously ignored or forgotten by the traditional concerns of local government . We will analyse the role and effect of one such initiative, that concerned with local economic and employment issues, and we will examine new developments by both the left, in Sheffield, and by the right, in London's Docklands . We will concentrate on the former, and hope to use our discussion to draw out some general points concerning the role and structure of the local state and its potential use by the left . It is also hoped that such a wide scope will be excused by the political importance of the current period for anyone on the left concerned with local government . This is more than just a matter of the concerted Tory attack on local democracy through ratecapping and abolition which we are now witnessing . We are coming to the end of the latest phase of left Labour control at the local level, and it seems especially apposite to stand back and take stock . The abolition of the Metropolitan Councils in 1986 will be accompanied by the first electoral test of many of the new left authorities (in London) and by a second more severe round of ratecapping . Moreover, several leading members of the municipal left, having built their reputations through local government, will be departing the scene for higher (if not necessarily better) parliamentary `things', and this also promises fluidity and change in many left Labour councils .

These councils came to power on a general surge of enthusiasm for'municipal politics' and optimism about the socialist potential of local government . After several years of fighting the council, many on the left active in community groups have chosen this moment to change sides, either as elected councillors or as politically appointed `Strategy Officers' . We need now to examine their actual achievements more closely, by stripping the rhetoric from the reality of five years of local government office, if only to prevent a repeat of the political defeat suffered over ratecapping when nobody seemed quite sure of what they were defending or what they would finance if given the chance, except for vague references to `jobs and services' . The left should thus be examining not only what local authorities are doing, and how successful they have been but also, crucially, why they are doing it . This paper is intended as a sympathetic contribution to that necessary task .

The importance of local states in restructuring social relations Before we move on to examine the new local economic policies of both left and right, we need to place them, and the other new policy initiatives in a wider context . Since 1979 local-central state relations in Britain have undergone a series of complex changes, resulting in a large-scale reorganisation of local administration . These changes have formed part of a clear, continuing and at times dramatic crisis between local and central government ; a crisis which has cut across party lines to provide internal dissent, and which has become linked to deep-seated divergences over the form society should take in the

15

Capital & Class

16

future and what it meant in the past . The analysis of local economic policies undertaken in this paper should be seen against this background of increasing change and tension, and it should be realised that these legislative, financial and administrative changes in local-central relations are themselves part of far wider social, economic and political struggles . For the restructuring of the local state is of immense importance in these wider struggles, because of the structural control of local state insitutions,' and the social relations which surround them, in franchise capitalist democracies . Put briefly, this means that the local state has not just been caught up in recent social change in Britain as one innocent part of the political machine, but rather that local state activities are crucial to interpreting, managing and promoting such change. This is because the structural activity of local government in capitalist societies is as much concerned with how it performs certain functions or duties, as it is with what these actually are . The debate over the local state has unfortunately tended to stress the latter, and has been drawn into many ultimately sterile arguments and classifications surrounding the functions of the local, as opposed to the central state (see Duncan & Goodwin, 1982b, for a review) . But these functions vary, and it is clear that there is no given need for housing provision, police, social welfare, education or anything else that is provided or managed locally to be mixed up in a local electoral system based on universal franchise . In many capitalist societies this is not the case and there has been as much or more capitalist history (and this includes Britain) without such a system,

as with it . And even when established under the institutional compromise of social democracy, many local state functions have fluctuated to and from local electoral influence . Since 1930, for instance, elected local authorities have lost their powers in respect of poor relief, trunk roads, supplementary benefits, hospitals, electricity supply, gas undertakings, water supply, community health care and sewage treatment (see Saunders, 1983, p . 2) . The key point is that we should not attempt to conceptualise and understand the local state merely by reference to the functions it performs . We must also take account of the social relations of the state, of how state institutions do things, as well as what they do . State activity is about interpreting society as well as physically managing it . We therefore see two separate, but interlinked, aspects to the structural role of the local state . Firstly, as Miliband put it some years ago now in a crucial but neglected insight, the local state is both agent and obstacle to central control (1969, p . 49) . Local state institutions, especiallyy electoral local government, both represent specifically local interests and at the same time represent the social interests dominant at the centre . This often contradictory `representational' role has been increased both by the rise of locallybased community politics and by the on-going economic and social restructuring of British society which has quite dramatically changed its geography (see Massey, 1984) . Places are becoming less alike than in the 1950s and 60s and there is correspondingly greater need for specifically local actions and responses . This is especially the case where some areas face a rather bleak future . Something must be done,

Local State perhaps something rather radical like large-scale public interventions in the local economy . Hence, ironically, as the need for specifically local responses becomes more acute and as new coalitions grow to promote them, so the need for those centrally strong interests to remove local autonomy becomes more pressing . Secondly, the local state plays a major part in managing and interpreting the social relations of franchise capitalist societies . Normally, in these societies, the social relations of class, gender, age or race are supposedly transformed into the atomistic and equal relations of individual citizens . The activities of state institutions and people's relationships within them play a crucial role in this . But social relations are unevenly developed in different places . Class relations, gender roles and political cultures are not at all the same in, say, Sheffield as in Camden and are quite different yet again in Croydon . Hence on the one hand the need for different policies in different areas and at the same time the use of local governments to reduce these divergent needs . Collective social relations should be transformed into those of individual citizens throughout the nation-state and local governments are one means of ensuring this . 2 While local authorities may point to special local needs and local electoral mandates as justifying specifically local policies, the centre establishes supposedly neutral procedures, such as Grant Related Expenditure Assessments, for invariant policy making . Local interests are neutralised while dominant interests are universalised as neutral (see CSE State Group, 1979 ; CSE London Edinburgh Group, 1979) . In this way the `representational' and I]?, C

2"7--f3

'interpretational' aspects of the local states' structural role coalesce . The importance of both aspects is emphasised and exacerbated by current events . In the current crisis of social democracy in Britain, that is a crisis in a system of class relations built up over the past 100 years or more (cf Foster, 1977 ; Middlemas, 1979), the activities of local state institutions are themselves influential in establishing the possibility of the rival 'Thatcherite' or `Progressive' scenarios for British society . Partly this is a matter of establishing the political validity of these scenarios, and in creating a political and ideological agenda for change . Partly also it is a matter of restructuring class relations and social consciousness that is necessary for either scenario to succeed . This role is now explicitly recognised, hence the current political importance of local government, and we will explore its potential through looking at local economic policies . Whilst recognising the limitations of concentrating on one policy, how the economy should work, and who should control it is a major part - perhaps the major part - of any recipe for social change ; and local economic policy is now seen as one important way of demonstrating and experimenting with the alternatives . It thus forms a crucial aspect of the important role local government now plays at the centre of competing ideologies and rival scenarios . As Michael Ward, chair of the GLC's Industry and Employment Committee has recently written, ` . . . the government is committed to the free play of market forces as the dominant principle of social organisation . Each successful Greater London Enterprise Board Project . . . is a demonstration that there can be an alternative' (1983) .

17

Capital & Class

18

Servicing capital - traditional industrial development Before we look at the new forms of local economic policy, we will briefly consider the more traditional type of local industrial development that they replaced . Like most aspects of local state policy, local economic initiatives have only recently attained such a heightened political importance . Until 1980 local industrial development took its place among the many unquestioned, uncontested and bipartisan policies of local government . That year, and the two following, saw the ascendance of several left-wing Labour councils committed to changing this situation, and also the beginning of the severest phase of the national `politics of recession' which gave them the impetus to do so . Prior to this, most local authorities indulged (and most still indulge) in what can be summed up as hopeful persuasion and petty bribery . They advertise their relative attractions, and provide below cost land, premises, equipment and advice . The hope is that footloose plants will locate in their particular area, that existing ones will expand, that new firms are generated, and that this will increase employment and regenerate the local economy . We call this `servicing capital' since these policies are aimed purely at attracting and aiding private firms, without changing how or why the goods are provided . But, as time has proved, there are a number of serious problems with this approach and the assumptions behind it . Local authorities possess very limited economic and political power - financially, legally, geographically and ideologically . They remain constrained by an interlocking web of assumptions,

rules and regulations . But even if these are recognised, problems still remain . For servicing capital is usually job redistribution, not job creation . Local authorities spend time and money persuading firms to move, at the expense of other councils . Moreover this is exacerbated by the problem of `jobless growth' . Firms often use relocation to actually shed jobs and change their labour process . An increase in production, or even in investment, does not automatically lead to more jobs . Success for labour and local economies, is not the same as success for capital (see Massey & Meegan, 1979) . Because of these problems, local authorities normally end up trying to influence the behaviour of a pool of small firms, justified by an acceptance that small firms are the key to local regeneration . Yet most small firms are backward and restricted in terms of resources, capital and information . They are usually dependent on larger companies for a market niche, and often provide low paid insecure jobs . To briefly conclude, servicing capital as a local economic policy is usually insignificant, often misdirected, and can even have a counterproductive effect . Essentially capital is being given some marginal aid in what it would do anyway . The failure of such policies to reverse local economic decline has led to the development of two new forms of local economic policy, which we call `restructuring for labour' and `restructuring for capital' . Both assume that local state intervention should be deeper and more fundamental than merely servicing capital, and that it is necessary to change the structure of declining local economies if regeneration is to come about. Although we will concentrate on the

Local State

former, we will spend a short time looking at the latter, as it is important to realise that the Conservative government is also using local state policy to promote economic alternatives - by `freeing the market' through Enterprise Zones, Urban Development Corporations, Freeports and `Task Forces' . These new policies do not only reflect the failure of the old ones . They also reflect the wider weakening and possible breakdown of the social democratic compromise in both labour relations and state policy . The decline of accepted political and ideological forms has led to the emergence of alternatives and the local state plays a crucial role in promoting and interpreting these, not least in the field of local economic policy . Recently these initiatives have gained a heightened political importance through the general acceptance by both left and right alike that they can indeed promise change at the national level . Witness the recent stress in Labour's Jobs and Industry Campaign on the importance of `regional economy', and on the importance of Labour's local enterprise boards in demonstrating that these economies can be revived (see for instance G . Hodgson in New Socialist, June 1985) . We will now turn to examine these new strategies to see if this political faith is at all justified .

Restructuring for labour

Scope and strategies What is `restructuring for labour' in local economic policy? We apply this term to those conscious efforts to alter local economies so as to bring about long-term economic development, through job creation and job enrich-

ment, for the benefit of local workers and the local community . The emphasis is on using firms for the development of an area for its people, to be contrasted with using an area for the development of firms in an area . There are four major strategies : (1) to identify and locate strategic plants, firms and sectors (those which possess a significant leverage in terms of the economic and social processes within the area) where intervention should be directed . This does not just mean servicing, but intervention in investment, R&D, product development, marketing, labour relations, intra-firm relations, etc . Above all, intervention should not be propertyled or based on the idea of jobs at any price . The definition of strategic is as much social as strictly economic . What potential exists in terms of developing local skills, satisfying local needs and enriching work life as well as developing the local economy? (2) to strengthen the position of workers . Support for enterprises should be conditional on unionisation, improved union access to decisionmaking, union rate of pay, improved working conditions, equal opportunities for women and ethnic minorities, etc . (3) to encourage alternative forms of production and management, such as cooperatives and worker-controlled labour processes . Socially-useful products should receive priority . (4) to improve the influence of local communities on their own economic management, though involvement in planning (e .g . the GLC's `popular planning') or through electoral accountability . These strategies have been implemented and supported by the creation

19

Capital & Class 20

of new institutions with specialised staff, such as Enterprise Boards or Employment Departments, and new mechanisms such as the planning agreement between a firm and the local authority, and `contract compliance units' . In practice, there is a large grey area between `servicing capital' and 'restructuring for labour' when it comes to the implementation of these strategies . Some LAS, like the West Midlands or West Yorkshire County Councils, concentrated on conditional support for strategic manufacturing sectors . Others like the GLC, have attempted to go further in changing labour-capital relations . All have been diluted in practice by the day-to-day pragmatic economic and political problems of declining local economies . But what distinguishes `restructuring for labour' is the emphasis on using the economy for the benefit of local workers and local communities . Local needs, defined socially, as well as economically, are placed first . The first problem for `restructuring for labour' There is one initial problem with this type of local economic policy . Recognising the limitations of servicing capital is not the same as removing these limitations . In particular, the same constraints of limited local government economic, political, legal and territorial competence will apply whether people are aware of them or not . We will illustrate this by looking at one of our case studies of local economic policy - Sheffield City Council (see Goodwin, 1985b, for further details on Sheffield). Sheffield is a regional centre of

500,000 people and Britain's steel city . The Labour Party has been dominant in local politics for nearly 50 years, and the labour movement has been well organised and influential in local workplaces . The city was relatively insulated from economic stress until the mid1970s . Since then there has been a sudden and dramatic collapse in the traditional economic and social base steel and engineering . In 1981 the council moved further to the left and initiated a local economic policy which soon became based on the idea of 'restructuring for labour' . The quantitative constraints on restructuring for labour Sheffield cc Employment Department (sED) claims to have created 1,000 new jobs in its first three years (May 1981-May 1984) . This is useful enough, but job losses in Sheffield over most of that period approached 1,000 per month . This disparity has arisen because many of the constraints limiting 'servicing capital' still apply, even if SED was very well aware of most of them . LAS have only a limited economic, political and legal competence . More specifically, SED's budget was only about £3 million p .a ., with an eventual staff of only 50 officers . The only ready source of finance within the LA's legal and political competence was the product of a 2p rate levied under section 137 of the Local Government Act 1972 . Fortuitously, this law allows this minor rate to be raised for any LA activity that can be defined as generally beneficial to the inhabitants of the area . It would be ultra vires, i .e . exceeding centrallydefined powers and therefore probably illegal, for Sheffield to spend rate income beyond this level in the absence

Local State of enabling legislation at the parliamentary level . The Conservative government has no intention of bringing forward such legislation, and still less of supporting Sheffield's employment policy with central funds . In fact is is doing everything possible to force Sheffield to cut both its spending and its rates . Even if the total budget of section 137 money was available for intervention in economic enterprises - which it is not - SED's £3m would hardly match the annual investment programme of a single medium-sized plant . To refer to some actual examples, installing two new production lines in a small electronics assembly plant demands £lm to £2m, while installing continuous casting in a major steel works costs between £lOm and £20m . There is at present no chance whatsoever of SED making any significant financial intervention in dominant steel, special steel and engineering firms, even if the latter did want to play socialist ball, which they do not . And even if they did, the firm's room for manoeuvre would be constrained by, for instance, an EEC plan for steel backed up by a national version based on criteria of short-term commercial profitability . SED's intervention in this sector became limited to research backing and moral support for unions fighting job losses . This kind of `servicing labour' is valuable enough . But it does not amount to sectoral restructuring for labour . The qualitative constraints on restructuring for labour There was, therefore, little possibility of changing restructuring for capital to restructuring for labour in Sheffield's steel and engineering sector . A third of the city's labour force

still worked in this sector in 1980, with up to 40% of full-time workers . Restructuring for capital was to reduce this workforce by nearly half by 1984 . All SED could do was `service labour' in the form of trade-union fightbacks . Even if successful, this is essentially defensive or even negative . The social and political meaning of restructuring remains unaltered . However, while recognising these limitations, SED found an alternative . Of course they could not hope to directly solve Sheffield's economic problems . Everyone knew that, including the local politicians who set up the department . But as it happened a small firm in the city's cutlery sector, threatened by bankruptcy, approached SED for help around this time . The cutlery sector, once a mainstay of Sheffield's industrial revolution, is now reduced to a number of peripheral, small and generally backward plants employing little more than 2,000 people in 1982 or less than 1% of the labour force . It was here that restructuring for labour could, perhaps, at least be demonstrated in practice . Some of the same quantitative problems still applied . Even in this single case, the financial resources available to SED were less than adequate . The department would have to act as a financial trigger, supporting and encouraging banking finance of various sorts to back the firm's recovery . The human resources available to the department were also almost swamped when, as we shall see, intervention in one firm dictated intervention in the cutlery sector as a whole . And of course, this demonstration of restructuring for labour would always be peripheral to Sheffield's economic fortunes in quantitative terms . It was

21

Capital & Class 22

hoped that the qualitative effect would be more significant . SED worked with unions, employers, banks and financial institutions to mount a rescue for the cutlery firm . Their support was conditional on a planning and employment agreement enforcing higher rates of pay, better training, improved union access to decision-making, SED representation at board level and so on . It was then that problems emerged limiting this qualitative demonstration of restructuring for labour . First of all, the cutlery sector in Sheffield had survived, in an economically marginal situation vis a vis foreign competitors, by offering low rates of pay and skimping on working conditions . To enforce high rates of pay and good working conditions would, in the short term, threaten the firm's competitive situation and hence stimulate job losses . Improvements for the workforce could only be relatively assured with a technical and labour process restructuring, increasing labour productivity or product quality and type and so improving the firm's competitive position . Restructuring for labour does not escape the demands of the market . But this labour process restructuring would absorb even more resources - all that had been done so far was to save the firm in financial terms and improve the position of labour . What the firm actually did remained the same . But if this real labour process restructuring was altered, the improved competitive position of this one firm would threaten the survival of the rest of the firms in that sector in Sheffield, as their employers and workforces soon made clear to SED . Would the department and its resources become completely sucked into this one - relatively marginal - sector?

As it happened SED and Sheffield City Council did not have to take this decision . Acting on the basis of conventional commercial rationality, one of the private banks withdrew support . The firm went bust in any case . An attempt to support a special steels company, set up by the workers to replace (in part) a private sector closure fell foul of the same logic . Sheffield had persuaded the parent company, in turn owned by a major multinational conglomerate, to act as a financial and customer guarantor . But after a year or so the conglomerate closed down on the parent firm and, in turn, the workers' company collapsed . The second problem of restructuring for labour and Sheffield's response These examples from Sheffield illustrate the second major problem of restructuring for labour . How is it possible to undertake even limited restructuring, never mind building an alternative local economy - or any local economy for that matter - on the basis of trying to rescue failing capitalist firms? They have usually failed for very good reasons - lack of innovation, low labour productivity, bad management, market failure and so on . LA intervention will be difficult, risky and will most likely fail . An alternative economy, or even demonstration of alternatives, is much more likely to be built on the back of successful firms, that is firms that have succeeded in a capitalist market . But these firms will hardly ever want restructuring for labour, they will most often have succeeded just by restructuring for capital, and in any case even if they wanted support they would have little desire or need to approach a left-wing LA to get it . Furthermore, the LA

Local State usually has little means of significantly influencing the behaviour of these successful firms . All they are left with are firms at the liquidator's door . The response in Sheffield has been to withdraw from this `fire brigade' role - not without considerable political stress . Aid to the private sector should not only be assessed in the social terms of restructuring for labour, but concentrated on cases where the local authority had real leverage . In the words of Councillor Helen Jackson, Chair of the Employment Committee : `If we operate the Employment Department and Committee through a City Council, we must start from the council as a base . The Employment Department is not a free-standing organisation and the number one place to protect and increase jobs is that over which you have direct control' (interview with authors) . As well as the LA'S own workforce and activities (now coming under increasing attack because of central government cuts and policies) this would mean enterprises where the LA was in a dominant position for market, financial or legal reasons . The local authority, not a multinational firm or a bank (as in the two cases reviewed earlier) should be the dominant outside influence . This response also had a departmental side . SED would now reduce its ambitions to the more realistic role of producing policy ideas and servicing other, better resourced departments . Local economic policy would be seen within the context of those activities where the LA had traditional competence (e .g . local planning, estates) rather than a separate policy area where a small department with few resources was elevated as the principal means of intervening in the local

economy . SED had put Sheffield cc's neck out too far, both in policy terms and institutionally . It was now to be withdrawn . (See also Alcock et al, 1984, for an interview with the former head of SED, entitled `A parable of how things might be done differently' .) The political roles of restructuring for labour As we have seen, local authority economic policy can only have a very limited economic role in any direct sense . This applies to restructuring for labour just as much as for the traditional LA role of servicing capital, despite all the improvements in both aims and practice incorporated in the former . This was a fact well appreciated by most of the policy's proponents, if perhaps the extent of the practical difficulties for local economic intervention were only learnt by trying . So it was not just a case that the political role of restructuring for labour gained prominence by economic default, as it were . This was explicitly a major reason for embarking on the policy in the first place . A quotation from a Sheffield City Council document, explaining the launch of their economic policy, will help make this clear . There were not only direct economic and employment aims, but also the policy would help to `build a confident, local working-class movement which concentrated its strength at its base and which is committed to develop genuine, socialist alternatives to the top-heavy policies of the last Labour government and the various monetarist policies of the current Conservative government' (Scc 1981) . Two `political' aims are expressed here (and similar statements can be found from other restructuring for

23

Capital & Class 24

labour authorities) . One is to demonstrate alternatives, both by intervening in the current political agenda and by influencing the agenda of a future Labour government . In this way local economic policy would have both an oppositional and a prefigurative role . This role is fairly well established and is now, more than ever as the direct economic limitations have become more obvious, often seen as the primary purpose of restructuring for labour . As Dan Sequerra, the ED's new head told us, when interviewed as Chair of the District Labour Party, `Since it is hard to see it as a success in narrow job terms (the ED's role) is a more long term one of exploring issues' . And in the words of his predecessor John Benington, `we're not just here to bail out capital, but we will get involved as part of a broader production and consumption process' (interviews with authors) . The council's quotation does, however, also express another `political' role for economic policy - that of political mobilisation . This role is also sometimes explicit in documents of this type, while political mobilisation is sometimes acknowledged as the overall purpose of the left gaining LA power (a point Ken Livingstone makes from the exposed but rather limited position of the GLC) . Nonetheless, the political mobilisation role remains far less explicit than the demonstration role, although David Blunkett the council's leader did admit to us that he saw the role of the ED as one of `political mobilisation, not as a social service' . Furthermore, it has several aspects and implications which are not explicit and may be unexpected . We will spend a little time following this up . As before we will use our Sheffield case

study, although this time our interpretation is based less on policy documents and more on an extensive series of interviews . (But see Blunkett & Green 1983 .) Restructuring for labour : mobilisation and recomposition The idea of political demonstration through local economic policy is clear enough, even if the practicalities are more confused . But what does political mobilisation actually mean? We can show this more easily in the context of Sheffield and its council's economic policy . Sheffield has been called a `red island' while South Yorkshire Metropolitan Council, centering on the city, is well known as `the socialist republic of South Yorkshire' . These names allude to the long history of Labour Party control over local government in the city and its region as well as a recent shift to the left, backed up by a wellorganised labour movement situated in a local social structure dominated by the male working class . The core of this movement in Sheffield was the skilled, male manual workforce in steel and engineering, making up over a third of the total workforce in 1970 (and 45% of full-time male workers) . These were quintessentially central workers (those considered essential by management) both in terms of their skills and their organisation . Management was forced to take account of their power in determining wages, working conditions, job content and job numbers . They were hegemonic in the local labour movement and in local politics, and provided most of the personnel running both, while gender roles in the community were organised to support and maintain their central-

Local State ity . (It is worth noting that being a red island in this way does not necessarily mean radical or progressive on all counts, or even most of them . Many observers see Sheffield as among the most conservative areas in Britain when it comes to the position of women .) The important point of all this for our purposes is that, in its heyday (1930-70) this politically, culturally and economically successful group did not need a local government employment policy . They provided their own, using their own organisations in the workplace, and they did quite well . Why bother with an outside body, with little direct influence (as we have seen) when they had real leverage through the control of their own industrial labour? This situation was reflected in an informal but well understood division of `labour movement labour' . The local authority and the Labour Party looked after housing, education, environmental pollution and other welfare services . This was, after all, where local government had most competence . It was the trade unions, based on a powerful works convenors' organisation, and to some extent the Communist Party, that looked after employment issues . These processes still have their repercussions . Two of the city's Labour MPs, both heavily involved in employment issues, admitted to us that in setting up the ED, `the council had entered a minefield, not just legally and technically but also politically - since the unions had to be convinced that they needed help from this source' . But these workers are now less central, politically and culturally, as well as economically . In the workplace, changing market positions and labour

process technologies have undermined their ability to influence management . This change was muted in the early 1970s as steel (especially the special steel in which Sheffield specialises) and engineering were at first less affected by the emerging recession and Britain's de-industrialisation . But the writing was clearly on the wall and this is the period when the `political' wing of the local labour movement took up a 'servicing capital' economic policy based on a diversification into services . By 1980, however, the new situation was clear and between then and 1983 the steel and engineering workforce lost over 30,000 jobs, or about half their total . This immense defeat was matched by a corresponding drop in organisational strength and morale . Rather than central workers, many were now members of a surplus population . Clearly they did now need help from their local authority, for they were now quite unsuccessful in providing their own local employment policy . And, at the same time, the local Labour Party and the council had shifted to the left making a restructuring for labour policy possible on their part . However, local politics were no longer dominated by this erstwhile central workforce in steel and engineering . The economic shifts we have described were inevitably linked with cultural and political shifts . These local changes were exacerbated by wider processes, such as the growth of service employment and public sector services, the expansion of higher education and the rise of the women's movement . Sheffield City Council alone employed 31,000 people by 1980 . White-collar and public sector jobs were now the most numerous, and unions like NUPE, ASTMS and COHSE

25

Capital & Class

26

were increasingly dominant in the local labour movement . Many people from varied backgrounds and situations, sometimes professional workers, women or people from outside Sheffield, were involved in both local unions and local politics . And, what was crucial, these people now had major economic and cultural bases from which to work . However, despite some social and political strains, both groups managed to work together in the formal political world . Sheffield did not experience the right-left/manual-white-collar divisions in the same way as some other local Labour parties . In Sheffield the shift to the left was a slower process which reflected an alliance between the new left and the existing left, and it recognised the continuing importance of the traditional social base as well as the rise of the new . Nonetheless, there remained a need to build bridges and recreate links . In the past the links between the traditional industrial base, the Labour Party and local government existed `organically' as a `natural' part of Sheffield life . This was less and less the case. These natural links, which had supported the success of a local labourism and allowed the rise of a red island, would now have to be supported institutionally . Employment policy became one means of doing this . SED provided an institutional link between the new Labour Party in local government and the old base, supplementing the residual organic' links which still survived . At the same time, of course, there was a real need to replace the old division of political labour . The industrial wing of the labour movement, once so powerful locally, could no longer defend its position adequately . To

stress employment policy as a means of recreating political lines of communication is not to underplay its potential in providing a social service in employment . Restructuring for labour would be of direct value to the old base . But here another strand emerged from our interviews and documentary analysis . Local economic policy was seen in some ways as a means of recomposing a political culture of radical labourism . In the eyes of one of our interviewees the department was set up partly `to retain the skills of Sheffield people . You can't change 50 years of culture, you can't become computer experts overnight' . Again, this culture used to be created `naturally' as part of Sheffield life . The integration of home, union activity, social life and local politics saw to that . But this culture was now decomposing . For instance, fewer young people were being drawn into the world of active trade unionism in the engineering or steel unions, their recreation was less centred on local working-class organisations, and the close-knit neighbourhoods of their parents' youth were now demolished . Nor did it seem likely that the new white-collar and public sector workforce would reproduce this sort of political culture - in some ways this new grouping contributed to its decline (although one should not rule out the rise of a new sort of oppositional culture based there) . This sudden `loss of community' seemed quite strongly felt by some of our intervieweees and local economic policy was seen as one means of halting cultural and economic decomposition or, more realistically, slowing it down until replacements could be organised . This is also one reason for the retention of a 'manufac-

Local State turing myth' in restructuring for labour policies . We have encountered this `myth' elsewhere, especially in older innercity areas where the left seems blindly to press for industrial jobs when new office and service sector employment is much more realistic (see for instance Southwark Trades Council's plans for the Surrey Docks in London) . But perhaps this is not so blind after all, since in other parts of the country this employment transition is definitely being accompanied by a political and cultural one . Along the M4 corridor, for example, the structure of the labour process in the new industries has all but wiped out skilled craftsmen, traditionally the base of 'labourism' . Instead a small band of white-collar technicians, not unionised of course, occupy their place between management and the assembly line with attendant political consequences . (See Morgan and Sayer, 1983, 1984 .) The final problem of restructuring for labour - propaganda and practice The economic and political sides of restructuring for labour are not separate, however, although this is the way we have organised this paper . Indeed their integration creates the final problem of this strategy . For, to be successful, demonstration, mobilisation and recomposition need something concrete to work from and, in the case of local economic policy, this means some economic success . It is more difficult to convince people about alternatives or mobilise them politically on the basis of arguments on paper, and recomposition actually demands economic success . As we have seen, this success is not easy and has been quite limited . Furthermore, there have been

economic failures like the two we 27 described in Sheffield . These may well be counterproductive, they may help convince people that alternatives don't work and, by raising hopes only to find them dashed, all the more effectively demobilise and decompose . The response in Sheffield, as described earlier, was to move local government economic intervention towards the public sector and those cases and areas where the city council had significant leverage . This move had a political as well as economic rationale . The politically counterproductive effect of the economic limitations of supporting private sector failures was well recognised, and events gave this line of thought added cogency . But also the move had something of a `return to base' about it - the new public sevice/white-collar base that is . This base, now vitally important to both the city's economy and its political life, was now coming under increasing attack from Conservative central government . Changing national policy and public spending cuts threatened to erode local labourism . For example, the huge cuts in expenditure on council housing, the 1980 Housing Act forcing council house sales, and the various Acts undermining both local authority Direct Labour Organisations and the provision of cheap public transport forced Sheffield City Council to overrule local politics and follow national Conservative policy . This was exacerbated by legislation reinforcing the position of central government and removing much of what local autonomy still existed (especially the 1980 and 1982 Local Government Acts, the 1984 'ratecapping' Act and the planned abolition of the Metropolitan County Councils

Capital & Class

28

in 1986) . Sheffield and South Yorkshire were particular pet hates in Conservative cabinet eyes, and stood to suffer more than most . In this situation the sensible response was to use local economic policy to try and protect what was becoming the council's primary political base, its own workforce . This decision had political reverberations, however . For it meant the council and the new left turning their backs on the very people they had been trying to make links with, to remobilise and to support - the old base in the steel and engineering workforce . Some of our interviewees saw this policy change as a betrayal by, to quote, `middle-class council officers and bureaucrats acting like bankers' . The real working class had been sold down the river . Not surprisingly perhaps, this led to an open split in the local Labour Party and its council focussing around the skilled manual/white-collar divide . This was confirmation, perhaps, of the `political minefield' that the department had indeed entered, although this was surprising in Sheffield terms as these divisions rarely became open . The network of organic and institutional links, feedbacks and checks is almost always dense enough to prevent such self-inflicted damage . As it happened, the split was soon repaired, although some of our interviewees from the old base still relish the thought that it is the public sector which should suffer very soon - now they wi!! experience the transition from central workers to surplus population . All this has prompted something of a rethink in Sheffield . As we have seen, local economic policy has been refashioned and redirected . But the story of restructuring for labour in Sheffield has also prompted the thought that

local economic policy is perhaps not the ideal vehicle for large-scale mobilisation or recomposition, whatever its value in a more limited employment sense . For this, Sheffield City Council should perhaps move to something else, the community arts for example . Certainly local economic policy now has a much lower political profile . (It is worth noting here that in London the use by the GLC of its grants policy to the voluntary sector has been extremely important in highlighting the 'interpretative' role of the local state, through helping to change perceptions of those services that should be supported by the public purse .)

Restructuring for capital Introduction

Finally, we turn to the local economic policies implemented by the Conservative central government . Announced as a policy of local regeneration through `freeing the market', any success for Enterprise Zones (Ezs), Urban Development Corporations (UDCs) and Freeports in fact rests upon large amounts of public money and government backing of various kinds . State support is necessary to show that the private market works! However, this strategy does share one departure point with the restructuring for labour of left-wing governments . It recognises that traditional `servicing capital' measures can do little to reverse local economic decline, that local economic and social restructuring is necessary to do this, and that the political lesson is as important as economic success . What differs, of course, is the type of restructuring thought necessary and the type of political lesson desired .

Local State We have called this strategy 'restructuring for capital' . Our review here will be brief, because this is an area quite well covered in the literature (see bibliography for references) . We will, however, draw a little on a case study we have made of London Docklands Development Corporation (LDDC) which includes an enteprise zone (see Goodwin 1985a) . In essence, however, we reach the same conclusion as before. We might expect greater economic success than with restructuring for labour, not just because restructuring for capital is less challenging but because this strategy is backed up by the considerable financial and political resources of central government . But there is little difference in the scale of success and, so far at least, given the resource back up, this strategy must be counted as an economic failure . Hence the political role of the experiment becomes all the more important . But, again, how is this political role to be sustained in concrete terms? Restructuring for capital as economic policy The UK now has 28 EZs, 6 Freeports and 2 UDCS . All are weaker policy versions of an original idea of displaying small Hong Kongs in run-down local areas, where the state would act to free private enterprise from the deadening hands of the state - especially local government and trade unionism . EZs give firms exemption for 10 years from various taxes and duties and offer a simplified planning regime favouring commercial development . Freeports, all near airports or docks, offer tax, tariff and customs privileges . UDCS (one is the LDDC and the other is in Merseyside) go further in directly replacing the competence of local elec-

total government for planning and development . They are responsible only to central government which appoints them . Marketed around the notion of freeing private enterprise, these measures in fact depend upon considerable public subsidy . Some are direct, like the 10 years' rates (property tax) holiday and exemption from Development Land Tax . (The Treasury actually pays local authorities their lost rate income and the more successful EZs are, the more this bill rises!) Nearly all EZs benefit directly from spatially defined development subsidies (e .g . development area status, British Steel Corporation industry areas) while several have received considerable infrastructural support from state agencies (local authorities, Scottish and Welsh Development Agencies, Department of Transport motorway building, the UDCS) . Indeed, on examination of particular zones it is these subsidies, rather than the existence of the EZ itself, which seem to have most economic importance . (See Anderson, 1983 ; Massey, 1982 ; Shutt, 1984 .) The height of this paradox is reached with the UDCS . They act not only as state development agency but even as state developer . The annual budget of the LDDC, for instance, is around £50m, not counting its own staff of around 500, together with specialised ministerial and civil service backing . Compare this with Sheffield's £3m budget, staff of 50, with ministerial and civil service opposition for a population over 10 times larger . In practice, many of these policies amount to little more than traditional measures of servicing capital . The hope is that by providing financial incentives and institutional support an

29

Capital & Class 30

area will somehow regenerate, or at least plants will move there . There is of course a greater amount of bribery and persuasion, fewer centrally-imposed constraints and a higher ideological gloss, but otherwise similar limitations apply . It is more a case of shifting

jobs . What is more, these jobs had cost about £16,000 each, while Sheffield and the GLC claimed £2,000 and £3,645 respectively (see GLC, 1985) . It is only the UDCs which really attempt a restructuring policy in economic terms . Here, the idea is not to restructure the market for the local social good, but to create market demand for development in a local area . The essential idea, according to one representative of the LDDC, is `to look at what the market place can offer' and

workplaces around, forgetting jobless growth and taking a good dose of the small firm myth rather than creating jobs . This was very much the message of the DOE's own consultants' report on EZS . Even the Isle of Dogs EZ originally one of the most favourably placed next to the City of London and with its own UDC - is little different . Speaking at a public inquiry in mid1984, an LDDC-backed consultant maintained that : `At the current slow rate of development, this area, with all its advantages, has little prospect of being fully developed in the next decade .' The attempt to lower barriers to investment, which have been misleadingly identified with planning restrictions and local authority taxation, has merely led to their redistribution . Instead of paying rates in Ezs, firms pay higher rents and property values increase (and decrease just outside the EZ) . This has led the London Docklands Corporation (containing the Isle of Dogs EZ) to advance land at below its cost in order to attract workplaces . In these conditions even the ostensibly `new' activities are often low-status units of large concerns such as warehouses or large stores . Certainly quantitative comparisons are unfavourable . Sheffield claims 1,000 new jobs created

quantity of employment, this remains a subsidiary concern . Furthermore, in the attempt to market the area to capital, the existing needs and skills of the local poplation are of little real relevance . Indeed, these may restrict marketing by preserving an unfavourable image . For, in the words of another LDDC representative, local inhabitants are a `redundant population' not only in economic terms but also for presenting an acceptable image of the area . To be successful, restructuring for capital means that the social and political character of the area should be changed, and a new and more appropriate class culture developed - a . neat contrast with the attempts of some in Sheffield to preserve a culture rooted in the past . So, for instance, LDDC has spent considerable effort in housing development - not strictly an economic measure at all . The idea is that owner-occupied

in 3 years, and Greater London about 3,000 . All the Ezs put together (some operating for 3 years, some for only 2) could only claim around 3,000, many of which were likely to be redistributed

housing, especially if in pleasant parkland or riverside sites, can attract a middle-class business or professional population (these houses, although often using land reclaimed by local

then to market an image of Docklands in the same way as a product is marketed, and in this way to attract firms to make use of the area . Although some attention is paid to the type and

Local State boroughs, are mostly too expensive for the area's existing inhabitants) . According to the LDDC Chief Executive owner-occupied housing is `the spearhead of the redevelopment of Docklands . It is the most important route to changing the perspective of the area and providing the basis of future economic stability' (quoted in Roof, July/ August 1982 19) . This brings us on directly to the political roles of restructuring for capital .

The political roles of restructuring for capital It is here that we return to the themes of demonstration, mobilisation and recomposition . If Docklands is to be developed for capital, rather than for the existing inhabitants, and especially if the existing social structure is to be `recomposed' in a quite different direction then the development process has to be insulated from local political pressure . Producing a different local social culture to that existing can only be retarded by local accountability . Indeed Nigel Broackes, the first Chair and head of Trafalgar House, saw the LDDC as capital's answer to local electoral politics ; `why face aggravation from Councils opposed to the profit motive and home ownership' (Guardian, 3 .7 .81) . Why indeed, when you have a government prepared to take development control away from elected local authorities . In the UDCS this control is removed, and in the Ezs and freeports it is largely diluted . UDC policy is accountable only to central government, the board is appointed by central government and works to a central government remit . As one senior LDDC officer told us, `we're on the same side (as the govern-

ment) . There is no point in the ministers creating authorities if they don't carry out government policy' (interview with authors) . Local councils or pressure groups may be consulted, but there is no need whatsoever to act upon any such consultation . In Ezs and freeports LAS retain formal power and responsibilities, but the terms of development are set by central government where LAS in fact relinquish a large element of their existing planning powers . If LAS don't like this, they won't get EZ or freeport status . This situation also, incidentally, gives central government a further weapon in diluting local government autonomy . The demonstration role of restructuring for capital has been well documented . Both UDCS and Ezs, as well as freeports, are seen as operating `in the national interest' . But what national interest is this? Geoffrey Howe (the Conservative minister with original responsibility for this local economic strategy) put it this way . EZS : Would be designed to go further and more swiftly than the general policy changes that we have been proposing to liberate enterprise throughout the country . . . the idea would be to set up test market areas or laboratories in which to enable fresh policies to prime the pump of prosperity, and to establish their potential for doing so elsewhere . . . If we find communities queuing up for Enterprise Zone status . . . we shall have gone a long way towards winning the debate . (26 .6 .78) The free market should be seen to work and divide and rule is one means of facilitating this (see Duncan &

31

Capital & Class

32

Goodwin, 1984, for expansion and references) . Finally, what has restructuring for capital to do with political mobilisation? This is also a matter of the national interest - as defined by the Conservative government . It sees its mission as redirecting British society towards the supposed virtues of Victorian capitalism . Government should stand back and let the market work, having first cleared away the obstacles created by a hundred years of misguided attempts to regulate markets . Only then can an entrepreneurial and individualistic culture of economic growth bloom . In the way are features such as trade union influence in labour markets, public regulation of capital investment, collective public services and redistributive taxes . So too is public

accountability and the social expectation associated with it . Markets should decide, and people should accept this . If social institutions cannot be brought into the market directly they should be subject to the `value for money' of idealised business practice where value is defined according to narrow and short-term monetary criteria . (Although as Japan, West Germany and Sweden show all too well, this is actually not very good business in practice . In all three countries, financial institutions are prepared to sacrifice short-term profits for long-term gain through low interest loans to industry (see Yao-Su Hun, 1975) . The government's local economic policy is seen as one part of this attempt to mobilise around this political and social ethos . In particular, it is directed to mobilis-

Local State ing support for an `entrepreneurial culture' . Rather than the private sector being seen as the cause of local economic decline (a position quite widely accepted by 1979) it should be seen as local economic saviour . In the words of a representative of the LDDC, ironically almost identical to those of the head of Sheffield's Employment Department quoted earlier, `We are showing how things might be done - we're leading the way .'

Concluding comments Firstly, local economic policy is not, directly, about economic change . It is about the way in which political demonstration and political mobilisation can support economic change, and thus what kind of economic change this will be . As Blunkett and Green have written (1983), `It is no accident that the Tories have chosen to launch a bitter and devastating attack on socialist Labour councils ; they know that examples of community, enterprise and social ownership and democracy at local level threaten their restructuring of our economic and social relationships' . Both left and right have recognised this . The former Conservative Chancellor, Geoffrey Howe, pointed out in 1982 that `language and tone are often as important as content and policy' . He went on about the need to restore profitability in private industry by curbing trade unions and scrapping minimum wage legislation . Furthermore, the `free for all principles on which Enterprise Zones had been founded might have potential application throughout the country . . . State ownership and control should be displaced or supplemented wherever C&C 27-C

sensibly possible by the disciplines and pressure of the market place' (Guardian, 8 .9 .82) . On the other hand Geoff Edge, Chair of the West Midlands County Council's Economic Development Committee, has claimed that they are `advocates and missionaries of new socialist ideas' (Guardian, 6 .10 .81) . Local economic policy may be fairly impotent at restructuring the local economy, or directly changing, through relations at work, local class relations . But it could well be quite influential in terms of people's expectations about these things . Hence all the political argument about a set of apparently minor policies ; hence all the conflict over the form of local government, about how it does things and who it does them for . In this vein, David Blunkett, leader of the Sheffield council, wrote that Local government is threatened so severely by Thatcher not because it challenges macro-economic policies but because it offers a genuine and legitimate defence against the encroachment of the new order . It is a living example of community as opposed to private endeavour . In key areas it offers a coherent socialist alternative which genuinely wins popular support . (Guardian, 17 .6 .83) As we have seen, the notion that `restructuring for labour' via local authority economic policies amounts to a `coherent socialist alternative' needs to be taken with more than just a pinch of salt . Nonetheless although we might take issue with this, the broad thrust of Blunkett's statement still stands . Local economic policy is a key area in terms of political scenarios and

33

Capital & Class

34 consciousness, just because the local state is a key place in the formation and maintenance of political perceptions, and hence of social relations . This means, and the evidence from Sheffield supports this, that the left cannot afford to ignore local government as a vehicle of social change . We can no longer have the luxury of simply discussing it as a (functionalist) arm of the central state . The work of Sheffield, and the other left Labour authorities, and the stinging reaction they have drawn from the government, has begun to expose this potential . Our theoretical section at the beginning of the paper pointed to why this might be so . But if we do accept that the local state is at the same time `agent and obstacle' to central control, rather than merely dismissing it as agent alone, we have to be clear about the scale and nature of the obstacle we are presenting . For as the example of local economic policy in Sheffield showed, any attempt to implement radical policies, from what after all are only small leftwing hillocks of power on a vast capitalist plain, will be fraught with problems . And this will remain the case whatever the complexion of government nationally . For even if Labour wins the next general election, the problems identified earlier concerning the use of local government for local regeneration will not disappear . It will require complicated legislation just to free authorities from the legal restrictions they face, still leaving the territorial, ideological and financial ones intact . Moreover, it will still remain a fact that even a small change in macroeconomic policy is likely to cause a

bigger dent in Britain's unemployment figures than the combined economic efforts of a few radical councils . To say this is not to denigrate the work of those involved, or to ignore the very real jobs created, or to dismiss the potential of local employment initiatives . It is merely asking for the limits to this potential to be taken into account when future policies are planned . For all too often local socialist initiatives promise far more than they actually deliver, which only compounds the failure . This danger is heightened when, as in the case of employment policy, such local initiatives do provide a glimmer of success and hope in a very depressing national landscape . But the straws must not be clutched too hastily, and the left needs to be sure of the precise role and scope of these initiatives in the future . If matters are devolved too much then the national economic levers which do undoubtedly have to be pulled may lack coordination . Yet if policies are too centralised we may be back to a discredited form of nationalisation and national economic planning which fails to take account of local needs and differences . As ever, the answer must lie in a combination of the two processes, and its precise form cannot be laid down here . But the point remains, and must be faced, that even under a Labour government the political mobilisation role of local economic policies may well still be greater than a more limited one of economic regeneration . Hopes should not be pinned too much on the latter role, when in the end the former may prove more successful at premising social change .

Local State

Notes 1 . In this paper we use the terms `local state institutions' and `local government' to refer to all sub-national policy-making and administrative state organisations, nonelectoral (like Water and Health Authorities) as well as electoral . The term `local state' refers to these institutions in the abstract . 2 . See Duncan and Goodwin (1982a) for a fuller development of the theoretical and conceptual basis for these arguments .

References Alcock, P ., Benington, J ., Cochrane, A ., Lee, P . (1984) `A parable of how things might be done differently', Critical Social Policy, 9 . Alcock, P ., & Lee, P . (1982) `The socialist republic of South Yorkshire?' Critical Social Policy, 1, 2 . Aldiss, T . et al (1980) `Surrey Docks and sad saga', Building, 239, 28 . Anderson, J . (1983) `Geography as ideology and the politics of crisis : the Enterprize Zones experiment', in Anderson, J ., Duncan, S . & Hudson, R ., Redundant spaces in cities and regions? Studies in industrial decline and social change, Academic Press . Blunkett, D . & Green, G . (1983) `Building from the bottom : the Sheffield experience', Fabian Tract, 491 . Brimson, P . (1979) `Islington's multinationals and small firms : magic or myth?' Islington Political Economy Group, London . Brimson, P ., Massey, D ., Meegan, R ., Minns, R ., Whitfield, S . (1981) `Small firms - the solution to unemployment?' South East Region Council, TUC . C&C (1982) `Socialist GLC in a capitalist Britain?' Capital and Class, 18. Cochrane, A . (1983) `Local economic policies : trying to drain the ocean with a teaspoon' in Anderson, J ., Duncan, S . & Hudson R ., Redundant spaces in cities and regions? Studies in industrial decline and social change, Academic Press . CSE London-Edinburgh Group (1979) In and against the state, CSE Books .

CSE State Group (1979) Struggle over the

State : cuts and restructuring in contemporary Britain, CSE Books . Duncan, S . (1983) `The local state and local economic policy : restructuring social relations and the struggle for political ideas in Britain', Regional fornyelse-hur? ERU - rapport 31, Industridepartementet, Stockholm . Duncan, S . & Goodwin, M . (1982a) `The local state and restructuring social relations : theory and practice', International Journal of Urban and Regional Research, 6, 2 . Duncan, S . & Goodwin, M . (1982b) `The local state: functionalism, autonomy and class relations' in Cockburn & Sanders, Political Geography Quarterly, 1, 1 . Duncan, S . & Goodwin, M . (1984) `The Local State and Local Economics Policy : Why the Fuss?' Sussex Working Papers in Urban and Regional Studies, no . 40 . Duncan, S . & Goodwin, M . (1985) `The local government problem : centralisation and resistance 1979-84', LSE Discussion Papers in Geography, 12, 13, 14 . Duncan, S . & Goodwin, M . (1986) The Crisis of Local Government: Centralisation versus Autonomy in Britain, Polity Press . Foster, J . (1977) Class struggle and industrial revolution, Weidenfeld and Nicholson . GLC (1985) London Industrial Strategy . GR (1983) `Propaganda by example : the economic policies of the GLC', Critical Social Policy, 2, 3 . Goodwin, M . (1985a) `Locality and Local State : economic policy for London's Docklands', Sussex Working Papers in Urban and Regional Studies . Goodwin, M . (1985b) `Locality and Local State : Sheffield's economic policy', Sussex Working Papers in Urban and Regional Studies . Hetzel, O . & Williams, G . (1983) 'Enterprise zones, an enticing title in search of a concept - the us Approach', unpublished paper presented at the Oxford Conference on urban politics in Britain, Political Studies Association, August . Jessop, B . (1980) `The transformation of the state in post-war Britain', in Scase, R . (ed .) The State in Western Europe,

35



Capital & Class 36

Groom Helm . Leys, C . (1983) Politics in Britain : an introduction, FEB . Massey, D . (1982) `Enterprise zones : a political issue', International Journal of Urban and Regional Research, 6, 3 . Massey, D . (1984) Spatial divisions of labour, Macmillan . Massey, D . & Meegan, R. (1979) `Labour, productivity and regional employment change', Area, 11, 2 . Massey, D . & Miles, N . (1983) `Sex, grouse and happy workers', New Statesman, 22 .4 .83 . Middlemas, K . (1979) Politics in industrial society : the experience of the British system since 1911, Deutsch . Miliband, R . (1969) The State in Capitalist Society, Weidenfeld and Nicholson . Morgan, K . & Sayer, A . (1983) `Regional inequality and the state of Britain' in Anderson, J ., Duncan, S . & Hudson, R ., Redundant spaces in cities and regions? Studies in industrial decline and social change, Academic Press . Morgan, K . & Sayer, A . (1984)'A modern industry in a mature region : the remaking of management-labour relations', Sussex Working Papers in Urban and Regional Studies, no . 39 . Pickvance, C .G. (1982) `Policies as chameleons : an interpretation of regional policy

and office policy in Britain', Dear, M . & Scott, A ., Urbanization and urban planning in capitalist society, Methuen . Queenspark (1983) Brighton on the rocks: monetarism and the local state, Queenspark Rates Book Group, New Series 1 . Available from 13 West Drive, Brighton, East Sussex . Saunders, P . (1983) `The "regional state" : a review of the literature and agenda for research', Urban and Regional Studies Working Paper, 35, University of Sussex . Scase, R . (1977) Social democracy in capitalist society : working class politics in Britain and Sweden, Croom Helm . Sheffield City Council (1981) `Alternative economic policies - a local government response', Sheffield Town Hall . Shutt, J . (1984) `Tory enterprise zones and the labour movement', Capital and Class, 23, 19-44 . Ward, M . (1981) `Job creation by the council, local government and the struggle for full employment', Institute for Workers' Control pamphlet, 78 . Ward, M . (1983) `Labour's capital gains : the GLC experience', Marxism Today, December . Yao-Su Hu (1975) `National attitudes and the financing of industry', PEP Broadsheet 559 .

Swasti Mitter

Industrial restructuring and manufacturing homework : immigrant women in the UK clothing industry • CASUALISATION OF EMPLOYMENT and a concomitant rise in homeworking have been among the most significant aspects of the industrial restructuring process in Western Europe in the last decade . The subject, however, has received far less than its fair share in academic journals, especially in those concerned with economic issues . The few, albeit outstanding, empirical studies that have been undertaken so far in this area are significantly by women scholars concerned with the changing gender-structure of employment in the wake of new technology (Huws, 1984(a), (b) ; Monod, 1983(a), (b) ; Lie, 1983(a), (b) ) . Most of their work, as a result, has been concerned with the structure of employment in `high-tech' industry, where 'teleworkers' or `remote workers' are performing a larger share of professional work, such as programming or system modelling, from the `comfort' of their homes . Indeed, these studies effectively explode the myth of the desirability of working from home . A majority of the new technology homeworkers, like traditional homeworkers, are women .

This article argues that recent government and other studies have failed to identify the proliferation of home-work and small sweat shops in the clothing industry in the UK . Swasti Mitter dismisses the argument that recent changes in labour/output ratios can be explained by increased labour productivity in the clothing industry, suggesting instead that an increasing proportion of output is being shifted from factories to the unregulated sector whose workers do not appear in official estimates of the labour force . She argues that the trends in retail organisation and competition have led to subcontracting as a rational strategy for cost minimisation as has occurred in other European countries, particularly in Italy . And that the insecurity of immigrant women within the British state, together with their position within their own communities makes them a suitable source of labour for the 37 unregulated sector where they are vulnerable to exploitative working conditions and pay with little recourse to protection either from the state or trade unions .

Capital & Class 38

The ideology of the nuclear family, in which a woman is expected to be the main carer for the children, makes it easy for the large companies to have access to a captive pool of workers, but the advantages to the women workers are not so clear . The actual and potential spread of `remote working' point to new, yet definite, organisational changes in the business units . The message has been taken up with remarkable alacrity by the commercial planners, especially in the building industry . The image of the homeworker that emerges in the planning literature, as in the futuristic writings in this area, is that of a middle-class white woman trying her best to `combine work with home life' (Donnison, 1984; Aldrich, 1984) . She inhabits her electronic cottage, in the shape of a detached house, and uses 'home-link' technology to work from home (Toffler, 1980 ; Williams, 1981) . This new type of homeworker may play a crucial part in the workforce of the future . However, the purpose of my paper is to emphasise the growing importance of yet another type of homeworker, who is far less privileged and far more difficult to identify . Outwardly such homeworkers may appear to conform to the age-old stereotype of the worker confined to a sweatshop in a pre-industrial sciety . Their rapid growth in number, in the last decade, however, has been an inevitable consequence of the industrial restructuring in the UK in reponse both to overseas competition in a recession-ridden economy and to changing marketing strategies with the introduction of new technology . These homeworkers suffer the same hazards of the `double day' and insecurity of contracts as their middle-class counterparts, but are far more vulnerable to exploitation, particularly those of working-class origin and of ethnic minorities . They share the squalid living conditions of inner-city areas, and above all are completely invisible in the official statistics in spite of their growing numbers . The recent rise in homeworking is, as I shall try to show, part and parcel of a burgeoning sweatshop economy . This is the reason why I do not differentiate in this paper between homeworkers and workers in unregistered small sweatshop units . Both types of worker find work through kin or community links and share similar hazards of work, invisibility and insecurity .

Quantification myths surrounding homeworkers

It has been quite common, as Rubery and Wilkinson have shown, for manufacturing outwork to be discussed in economic literature as `anachronistic', and diminishing in use (Rubery & Wilkinson, 1981 : 117) . Massive decentralisation of the production process and a consequent rise in 'lavoro nero' in the Italian economy, however, have recently revived the interest of econom-

Clothing industry

ists in manufacturing homework (Brusco, 1982 ; Solinas, 1982 ; Mattera, 1980 ; Murray F ., 1983) . Nonetheless, the myth continues, particularly among planners, that the sweated form of homeworking in traditional manufacturing industries, such as clothing, is a legacy of yesterday's technology (Donnison, 1984 : 6) . In moments of optimism, it is thought that one can dismiss it as a sad but transitory phenomenon . Such an optimism pervades the collection and interpretation of official statistics . For example, a recent article in Employment Gazette states : Manufacturing homework is now a relative rarity ; white-collar and service work (both traditional and new) had already overtaken manufacturing work as predominantly home-based work, well before information technology began to exert its influence on work arrangements in the 1980s . (Hakim, 1984(a) : 10) The author's `inescapable conclusion' (p . 10) is based on the evidence gathered by the supplementary interviews to the spring 1981 Labour Force Survey . The survey showed that only 72,300 people were engaged in manufacturing homework - a very small proportion of the total of home-based working, however narrowly defined : If the focus is restricted to people working at home, manufacturing homework still accounts for less than one third (29%) of all homeworkers . This is despite a very broad definition of manufacturing work . . . (ibid ., p . 10) The conclusion seems less inescapable, though, if we remember that an official survey, by definition, cannot take account of the most important shift in the pattern of manufacturing employment in the last ten years : from the official to the unregulated sector, where recruitments are not made through the main channel of the labour market, where payments are made in cash, and taxes and national insurance contributions are not paid . As this sector operates beyond the pale of the government regulations, the workers do not enjoy the protection of employment and labour legislation that is extended even to the very low-paid workers in the official sector . Indeed, such transference of jobs to the unregulated and underground economy has been considerable, as anyone with first-hand experience of lowtech manufacturing industries in Europe would confirm, in order to survive the competition of imports from low-wage economies in the last decade (Mitter & Van Luijken, 1983) . It is difficult to assess the spread of homeworking in recent years without specific and explicit reference to the expanding size

39

Capital & Class 40

of the unregulated and underground economy . Just because the 'putting-out' system in the manufacturing sector does not figure prominently in an official survey, it would be misleading to dismiss that system as a myth perpetuated from an earlier period : The image, or stereotype, derives from these types of work that are long-established and traditional, and were the primary motivation, in the early part of the century, for creating Wages Councils and Health and Safety regulations to control the evil of sweating . (Hakim, 1984(a) : 10) Official ignoring of the spread of manufacturing homework will no doubt frustrate the efforts of grassroots researchers, such as homeworking campaign groups funded by local councils and spread all over the country (Greater London Council, 1984(a), (b), (c) ), as well as that of Low Pay Units . Since 1974 these bodies have been trying to make a case for extending the pathetically inadequate provisions of existing Wages Councils, Environmental health Offices and Factory Inspectorates, to cover effectively the conditions of work and employment for sweatshops and homeworkers . Most of the grassroots research in the last five years, however, has been directed towards `the exposure of the extent of homeworking, the low pay and the level of exploitation' (Greater London Council, 1984(b), p . 9), as it is felt that `it is just as important as pure quantification, i .e . playing the numbers game' . It was also felt that establishing solidarity with homeworkers was the necessry precondition for a valid quantification, because the invisibility of homeworkers in the manufacturing sector is the result of poverty and fear . Homeworkers may be frequently in receipt of state benefits, as either they or their husbands are without proper jobs . They are insecure, as they are often afraid that they are infringing the law . It is difficult for them to come out of the closet . Let me put the problem in the words of an outworker herself : I do not think the authorities encourage people to be honest and declare their work . In my case, my husband is on a very low wage, so we are in receipt of Family Income Supplement . So I work to help pay for the children's shoes etc ., but whatever I earn is deducted off FIS so in actual fact I end up working for nothing . To me it seems there is no way out of the poverty trap, as the more I earn, the more is deducted from FIS . (Outworkers' Own, Issue 2, March 1984, p . 6) If the poverty trap makes it imperative for indigenous white homeworkers to remain invisible, it is even more important for the immigrant women workers to avoid the attention of official-

Clothing industry 41

dom . Faced with a bewildering maze of rules and regulations, they are often worried about the legality of their status in the host country. The very insecurity of these women in British society makes them particularly attractive to employers, as they are able to pay workers very low wages, often as low as ten pence per hour (House of Commons, 1981(c) : 183) . In view of this situation, it is not difficult to see why grassroots researchers had to spend so much time and energy simply on making the problem `visible' . But the difficulty of quantification makes it easy for the Department of Industry to dismiss their evidence as `unreliable and probably exaggerated' . (For Norman Tebbitt's response to homeworkers' evidence, see Outworkers' Own, 1983, Issue 7 .)

The lack of quantification does, however, pose problems for the campaigning groups when they try to establish the working and employment conditions of homeworkers as a valid issue (see House of Commons, 1981(a), (b) ) . But even more, the failure to take into account the rise in homeworking leads to paradoxical analysis and conclusions in academic research, even in that funded by policy-making bodies . In this context, I should like to refer to the latest and most painstaking work done at the Science Policy Research Unit at Sussex University by Hoffman, Rush and Soete in connection with the diffusion of NT and the structure of employment in the clothing industry (Hoffman & Rush, 1985 ; Rush & Soete, 1984) . The conclusions of their impressive studies, funded by ODA and ILO, are as follows: Investment figures . . . show a more or less steady increase in clothing up to 1974 . After that investment fell dramatically and by 1982 was at an all time low . It is worth noting that the slowdown in investment after the peak in 1974 did not lead to a significant decline in productivity growth in clothing . . . suggesting that other factors, such as the shedding of labour and increased scrapping of older plants were the major factors behind the productivity growth . The increase in best practice productivity growth, however, leads one to believe that whatever investment took place, it was primarily of a labour-saving nature . (Rush & Soete, 1984 : 204) These conclusions somewhat contradict some of the observations contained in the same series of papers . To start with, the capacity-utilisation index, as computed from the official statistics, shows a steady decline, indicating that the increase in labour productivity could hardly be attributed to a rapid transition to a new vintage of capital . To solve the problem, the authors suggest

Paradoxes of quantification : gaps in academic research

Capital & Class 42 Figure 1 Investment and average labour productivity in the

UK:

clothing and leather (1948-82)

E U) Nrn - T 6

W 4) C

c

~-F

E cz nE m -p

40 0

0

C N

4

AVERAGE LABOUR PRODUCTIVITY

0

-100

cz J

-

80

- 60 - 40 INVESTMENT - 20 1950

1960

Source : H . Rush and L . Soete (1984) 'Clothing', in Basic Consumers' Goods, ed . Ken Guy, Gower .

1970

1980

Clothing industry

that it may be reasonable to accept that the assumed scrapping in official capital stock might be a significant underestimation of actual scrapping, particularly for the most recent period (Rush & Soete : 203-9) . Those with first-hand experience of the industry, however, would argue the opposite way . A buoyant market in second-hand industrial sewing machines would seem to point to a rather different picture (Rainer, 1984 : 145 ; NEDO, 1971) : official scrapping, if anything, may be an overestimation of the actual scrapping rate . How then does one account for the rise, or even the maintenance, of labour productivity in the clothing industry, despite a marked fall in investment - and without a discernible trend to increased capacity - utilisation? A plausible alternative explanation could be the intensification of the work process . This involves, for example, speeding up on assembly line operations or reduction of time involved in handling a job with the help of small and inexpensive machinery . Intensification, therefore, refers to `soft' changes in work organisation rather than `hard' changes in production technologies . Over the period 1968-73, Massey and Meegan found that the dominant source of productivity increase in the clothing and footwear industry came from these soft changes (Massey & Meegan, 1982) . However, one should remember that the period they covered was also characterised by a steady increase in total investment (see Figure 1) . Indeed, it is not often easy to disentangle the two processes . One could posit that only an increase in investment leads to a new vintage of machines with embodied technology of higher productivity and that the full potential of these new vintages of machines may only be realised after a given time-lag, and in conjunction with appropriate changes in work organisation (Guy, 1984 : 45) . But over the period 1974-83, when the industry experienced a sharp and steady decline in total investment, the scope of increasing average productivity through soft changes, while the stock of capital remained old, must have been relatively limited . One then looks towards the third alternative explanatory factor, i .e . the rationalisation of the industry during the time of recession . Even with a fall in investment, it is possible to increase average productivity if inefficient firms close down and the production gets concentrated in a smaller number of . firms with higher marginal productivity . The Census of Production data throw some light on this . During the period 1979 to 1982 - the worst period of the present recession in the clothing industry the number of establishments fell by nearly 14% (from 7,495 units to 6,273 units) . The rationalisation that may have arisen from these closures however has been counteracted by the large

43

Capital & Class 44

numbers of minifirms that have sprung up on the fringes of the official economy in areas of high unemployment . According to the recent Euromonitor publication on the UK clothing industry, in the West Midlands alone, there has been a growth of at least 400 such unregistered minifirms employing 20,000 or more people (Euromonitor, 1985 : 48) . In the makeshift, fly-by-night factories, the marginal productivity is unlikely to be significantly higher than in established firms . The answer to the paradox of rising productivity in the face of falling investment, therefore, could lie in the definition of productivity itself. Labour productivity has been defined in terms of the relationship between gross output in the clothing industry and the officially registered employees in the industry (Rush & Soete, 1984 : 235) . Defined this way, labour productivity will tend to show an upward trend, even in the absence of any technical changes, if some of the employment gets shifted from the official to the hidden economy . The definitional problem of productivity is further compounded by the methodology followed in the collection of official statistics . The Census of Production survey does not cover units employing fewer than 20 people . The official figures for production are `adjusted' for smaller units, as the census forms only part of a system of industrial statistics that includes monthly and quarterly inquiries into detailed products and sales . Even this adjustment does not take into account the sale of garments in market stalls and unregulated retail outlets, which are not officially reported . Similarly, Census of Employment figures are based on larger employers and are `adjusted' on the basis of one in ten of the small and new employers . The annual employment figures therefore include `estimates' for establishments not making satisfactory returns and not selected for the Census . The resultant estimational errors that the official statistics may include may be of little significance if the bias remains uniform over the years . However, in view of the proliferation of sweatshop units and the rise of homeworking, there may be a serious danger of overestimating the labour productivity if employment gets shifted from larger establishments of the regulated sector to smaller units in the hidden economy . This argument will be elaborated later in this paper . The technological basis of homeworking and the sweatshop economy

The structure of employment in the clothing industry has always been ideally suited to a shift from the open to the hidden economy, even before the introduction of new technology (NT) . It is a structure that follows from the organisational nature of the garment industry in Europe, which on the one hand is characterised by a concentration of economic power in a small group of large

Clothing industry

retailers, and on the other by a decentralised mode of production, among a large group of small manufacturers (Clairmont & Cavanagh, 1981 : 199-256) . A chain of subcontracting, a major feature of the trade, has been the legacy of the massive deskilling of labour, which arose out of the changes in the inter-war period . Fragmentation of the production process made it possible for the assembly of a garment to be based on a series of short simple operations for which operators can be trained very quickly . Instead of making the whole garment ('make through'), each machinist can be assigned to making only one stage of it ('sectionwork') . Despite this change in mechanisation, the production of clothing still remained dependent on human labour . The extensive subdivision of the production process only demolished the craft-status of male tailors and made it possible to replace craftsmen with machinists (Coyle, 1982 : 14) . The process also allowed women to enter the trade as direct operatives in large numbers . Gradually, machining became classified as unskilled work and came to be known as a `women's occupation' (Birnbaum, 1975) . The classification itself reflected the socially constructed differentiation of skill categories where skilled work is work that women do not do (Phillips & Taylor, 1980 : 86) . The vestiges of craft skill were retained in the pre-assembly stages of production, such as designing and cutting, and as Coyle pointed out, were guarded by men in factories as a `kind of retreat' . The assembling job, the most labour-intensive part of the production, can, however, be executed reasonably effectively either on the premises, or by the outworkers on a subcontracting basis . The choice between `in-house' work and subcontracting depended on the relative disadvantage of a loss of control and supervision as against the possible benefits of lower overhead costs . In the volatile market of the fashion trade, the benefits of reliance on outworkers can be quite high (Bisset & Huws, 1984 : 18 ; Hakim, 1984(b) : 148) . It is interesting to evaluate the introduction of new technology in this context . Machining costs, which account for 80% of the total labour cost in garment making, have hardly been affected by the recent changes in the techniques of production . `What counts in the fashion trade is the hand that guides the piece of limp cloth' (Campbell, 1979) . This was true at the beginning of the century, and incremental changes in sewing-machines as introduced by the NT have not altered the picture even today (Hoffman & Rush, 1985, chapter 5) . In contrast, computer-aided machines have revolutionised the activities of grading, marking and cutting . This has resulted in dramatic increases in the speed and accuracy of the preassembly stages of production for those firms able to afford and

45

Capital & Class 46

efficiently use the system available (Rush & Soete, 1984 : 181189) . Although a major advance, the systems have had very little impact on the potential or actual labour costs . Since grading, marking and cutting represent only a small fraction of the total labour cost, reducing labour inputs did not prove to be a major criterion for firms in their decision to acquire computer-aided systems . The main benefit of the systems lies in the potential increase in managerial control, by reducing the industry's reliance on the moodiness of skilled workers . The gain from more efficient utilisation of fabrics is also substantial . More significantly, the introduction of the new systems can effectively reduce the lead time - a vital strategy in a competitive market . By using Computer Aided Design (CAD) systems, some firms are reported to have achieved a time-reduction in grading and marker making by a factor between two and six . The grading that previously required three to four days can now in some cases be accomplished in a single hour (Hoffman & Rush, 1985 : 4-6) . In spite of the advantages, the implementation of computeraided technology has been rather limited in Europe . The major reason is the outlay involved . Since the initial capital cost of interactive grading and marking equipment is high, the target market is only the large clothing manufacturing companies with sales in excess of $50 million a year . Again, with an initial capital investment of $500,000, sales of computer-aided cutting machines are limited to firms with an annual turnover of $50 million . In order to install the cutting system, the firms must already be fitted with a computer-aided grading and marker system from which computer tapes containing the cutting data can be prepared (Ibid) . In an industry such as clothing, where industrial concentration on the manufacturing side is traditionally low and where small firms numerically dominate the market, the taking up of these new machines, understandably, has been very slow . In spite of this, there has been a visible shift in the relocation of production in the clothing industry, from the third world in favour of Western European countries, since the beginning of the 1980s . This is primarily because of increased and efficient application of NT in the marketing and distribution side of the industry . As the NT improves communication and speeds up the possible response to fashion changes, it becomes imperative for the retailers to have access to suppliers that can modify an order readily . Flexibility of supply - the capacity to fulfil orders at short notice and the capacity to change an order with a minimum of time-lag - gives the domestic suppliers a competitive edge over their overseas counterparts . A reversal in the trends of international relocation of production is therefore markedly visible in the fashion-wear sector of the industry, where a conspicuous

Clothing industry

47

shift by the customers to 'co-ordinated' looks (as pioneered by Benetton, Next and such new chains) on the one hand, and a gradual shift to cheap casual wear on the other, have created a need for greater flexibility in terms of design and colour (Euromonitor, 1985 : 48) . But this is the market where productions are planned in small batches, as frequent changes in fashion make long runs of production uneconomical . In this volatile market, it also becomes expensive to hoard labour on the main factory floor . Outside sourcing, whenever it is possible to do so, makes a sensible management practice, especially for the labour-intensive assembly side of the operation . The quality and brand image, if and when it is necessary, can be maintained by adequate supervision of the pre-assembly and finishing stages of production on the main factory floor . The roles of the sweatshop economy, of artisan firms and homeworking become crucial in this scheme of subcontracting by domestic manufacturers, where access to a captive and disposable workforce becomes an essential strategy for reducing the unnecessary overhead costs .

It may be of some importance here to analyse the strategies that Benetton, the Italian clothing company, has used to increased its share a highly competitive fashion-wear market . In view of the publicity that the management strategies of Benetton have received in the last two years in the UK (Buxton, 1983 ; Withers & Fawcett, 1984), it may not be unrealistic to assume that the company's policies are flaunted in Britain as a model for others to emulate . Essentially a family business, this company has experienced a phenomenal success within five years . In 1978, its jeans, jerseys and T-shirts were on sale at a few hundred shops in Italy, but exports were nil and turnover was a respectable but far from dazzling L66bn (£30m) . Yet in 1983 Benetton was expecting to sell several times as much in money terms - L480bn worth through 2,500 shops worldwide . The Benettonisation of the globe has included all the major cities of West Germany, America and even Japan . Luciano Benetton, the 49-year-old director of the company, has been named as one of Italy's most successful directors, and the Financial Times in the UK has hailed him as `the man who fashioned a clothing empire' (Buxton, 1983) . Particularly significant for the success of his strategies is the maximum combination of control and flexibility - control over marketing and retailing, and flexibility in production . Ascertaining the impulses of fashion is done with utmost sophistication and with help of new technology . It is appreciated by the company that the key to the `fast fashion' business is the ability to

Flexibility and control : the case of Benetton

Capital & Class 48

gauge the market and swiftly meet demand . The organisational policies are positively directed that way : Housed in . . . Villa Orba, in a succession of clinically white rooms, is the heart of a complex information network that will eventually be linked to a computerized cash till in each shop, even those as far away as Washington and Tokyo . Every outlet will transmit detailed information on sales daily to headquarters to speed up the usually long-winded popular lines . If orange sells out in New York, Benetton will be asked to dye and supply replacement knitwear in half the manual time . To speed the delivery, Benetton has commissioned Comau, the Fiat subsidiary that manufacture industrial robots, to build an automated warehouse near Ponzano . . . It will be manned by two technicians, each of whom, aided by an army of 13 robots, will be capable of emptying and loading a juggernaut in 30 minutes . (Withers & Fawcett, 1984) It all amounts, as Luciano Benetton says, to raising fashion from the artisanal to the industrial level . But this is only as far as the marketing and related organisational changes are concerned . The centralisation of marketing activities stands in sharp contrast with the decentralisation of production activities . Although Benetton has eight factories in northern Italy, its payroll is less than 2,000 . But it gives work to another 6,000 people - those who work for the 200 small makers of semi-finished clothes, also in northern Italy, who supply Benetton's main plants . These small artisanal firms in Italy, in turn (like ethnic sweatshops in Britain), rely on a familial network for recruitment of female machinists, who work either on the factory floor or from home (Solinas, 1982) . The skilled parts of the production process - designing, dyeing, cutting and final ironing - are handled by Benetton . But most of the basic weaving and making up is done outside the company's plant . The rationale is obvious : 'Benetton thus holds down its overheads, avoids the thankless task of managing a vast workforce and benefits from the much lower costs of the small subcontractors' (Buxton, 1983) . In many ways, Benetton epitomises the current as well as the potential future use of NT in the oligopolistic capitalism of the garment industry in Western Europe . NT increases the power of the big and successful companies to expand their market share by allowing them to respond speedily and efficiently to a change in market demand . But NT also facilitates the scope of subcontracting through a more effective fragmentation of the production process : the unskilled operations of 'shell-making' can be releg-



Clothing industry 49

ated to subcontractors, while the company retains complete managerial control over the designing, cutting and finishing of garments .

The multiplicity of structures through which managerial control operates assumes a special significance in the UK . Here, long before the advent of the NT, the garment industry was characterised by an uneven distribution of power between the retailers and the manufacturers in the domestic economy . Concentration of distributive outlets in the clothing industry is high in the UK even by West European standards . By 1976 large high-street retailers accounted for just under 50% of clothing and footwear sales ; similarly, in 1979, they accounted for some £2,595 million of the £5,119 million turnover in the retailing of textiles, clothing and footwear (Rainie, 1984 : 147) . The largest of them is Marks and Spencer, which accounts for 29% of clothing sales ; in the case of some garments, their business covers more than half the market . The intensity of competition in the oligopolistic market is high : since more than half the retail sales are handled by no more than a dozen chains, the activities of retail outlets such as British Home Stories, Littlewoods, C&A, and Marks and Spencer have visible effects on one another's policies . The battle for the market share among retailers has a magnified effect on the numerous domestic manufacturers that supply them garments . Unlike Benetton, none of the famous retail chains in the United Kingdom is directly responsible for the production of its garments . More than six hundred suppliers cater to the demands of Marks and Spencer alone . In general, the concentration on the production side of the garment industry is very low (Rush & Soete, 1984 : 210) . In the inner city areas, where production of fashion clothes normally takes place, the concentration ratio is dramatically low . Over 80% of employment in London's clothing industry is accounted for by firms employing fewer than 50 people (Greater London Council, 1984(d) : 7). This specific nature of the garment industry has given rise to a very special relationship between the retailers and the manufacturers in the UK. As one of the Marks and Spencer suppliers describes it, the diktat of the retailer to the manufacturer in the UK `has similarities to the traditional address by a Sergeant-Major to his new recruits : You play ball with me and I will play ball with you' (Manufacturing Clothier, April 1981 : 17) . Marks and Spencer, for example, `becomes involved in every aspect of its 600-odd suppliers' operations, dictating not only the number of stitches and the width of hem, but also the profit margins of those from whom it buys' (International Herald Tribune, 1 September 1980) . C&C 27-D

The state of business in the UK : a suitable case for subcontracting and homeworking

Capital & Class 50

Threats of sourcing overseas also keep the margin low (Clairmont & Cavanagh, 1981 : 218 ; Raine, 1984 : 54) . The changing nature of the labour process in the garment industry from the mid-seventies onwards can be appreciated only with reference to this particular nature of the market . The domestic manufacturers in the UK, by 1979, had already lost a large share of the market to overseas suppliers . The share of imports in total sales had risen from 8 .2% in 1954 to 32 .1% in 1979 . The experience of the UK was not unique either . Between 1963 and 1978 the OECD countries moved from a position of being self-sufficient to becoming net importers of clothing to the extent of $11,000m (Hoffman & Rush, 1985) . Against this background, the recession of 1979 had a devastating effect on the domestic garment manufacturers . The rate of closure of factories, especially those producing fashion garments in the inner-city areas, was phenomenal (Birnbaum et al, 1981 : 74-83) . One of the major contributory factors to such failures was the price war that highstreet retailers waged against one another in order to secure a substantial share of a shrinking market . Principles of operation were simple : in order to keep the valuable custom, the retailers `demanded that their suppliers shoulder half the burden of the price cuts' (Rainie, 1984 : 151) . Under such pressures, even for the companies that managed to survive, the long-term effects on margins were serious and demanded drastic changes in business organisation . The alternatives open to manufacturers were limited and stark : There may be an attempt to cut overheads . . . there may be an attempt to pass on the lower profits received to the next down the line, and there is an added incentive to break the law . A common method used by contractors to deal with the financial problems is to liquidate the business and start up shortly afterwards under another name, thus avoiding creditors . This is often done with the same premises, same machinery and same workers . One group of clothing workers in London has been employed over the last five years by one employer operating through no less than eight different companies in succession . (In this situation) the outworkers and homeworkers are in the most vulnerable position . (Greater London Council, 1984(d) : 7) Reducing the direct labour cost, in this context, became a vital strategy for the manufacturers . A greater reliance on homeworking became an essential part of this overall strategy, as is shown in Figure 2 .



Clothing industry Figure 2

51

The structure of the London clothing industry: a typical example from the fashionwear sector Retailers Increasing concentration in large multiples .

Wholesalers Supply retailers or other wholesalers . Manufacturers Supply wholesalers or retailers . May not have any factory premises in London or elsewhere but act as agents for retailers in finding contractors to undertake the work and take responsibility for the supply of the finished product to the retailers . Also provide their own designs . Manufacturer/Contractors

Contractors

Undertake work on contract to

Work on short-term contracts

other manufacturers or retailers,

for manufacturers who often

and further sub-contract some

supply materials and patterns and

work . Provide their own designs .

i n some cases assist with premises and machinery . Also supply retailers, wholesalers or other manufacturers .

Outworkers

Homeworkers

Work as sub-contractors to manu- Individuals supplying contractor facturers and contractors . Perform or outworker . work on their own premises or contract out to homeworkers .

Source : Greater London Council . The London Clothing Industry p . 6 .

Introduction of new technology in the eighties has not reversed

NT, distributors'

the trend towards casualisation of employment in the UK . If

strategy, and a rise

anything, technological changes created a situation where the

in homeworking in

trend was likely to be intensified . As with Benetton, a speedy response to fashion changes has become the major strategy of the

the clothing

retailers in the cut-throat competition of the market - and a flexibility in the source of production has proved vital for the successful use of this strategy . Indeed, in an already saturated home market, the big retailers are also feeling the impact of some new entrants . On the one hand, smaller chains of `image' shops are catering to the demand of young age-groups (Manufacturing

Clothier, April 1984 : 17) ; on the other, the grocery supermarkets

industry

Capital & Class 52

have been gaining a market share in many of the imported basic garments (Rainie, 1984 : 153) . The big retailers have tried to counteract this by moving away, to a certain extent, from merchandise which competes with imports directly, and by introducing more and more fashion elements into their garments . Even Marks and Spencer has to struggle hard to maintain its share in the static market : `Marks, always ready to acknowledge trading mistakes, said it was trying hard to shed its middle-of-the-road fuddy-duddy image . "We welcome the Nexts, the Benettons and the other and meet the challenge with confidence . We are determined to find an image" .' (The Guardian, 24 October 1984) Trends in the last three years have been for the large retailers to move away from pure price-competitiveness as the major strategy . As the trade journal, Manufacturing Clothier, stresses in the article entitled `High Technology Fashion' (April 1984), the swing of the pendulum, away from competitive pricing on greater volume towards shorter runs with higher fashion content, has been the direct result of the possibility of assessing production requirements on individual lines with the help of the new computer systems . The most noticeable thrust has been to create market segmentation on the basis of fashion and innovation . The result is that the number of different styles in garments in the fashionwear sector appears to be increasing, as is the number of styles being discontinued from season to season . Where once maybe 5% of the styles would be replaced, it can now be nearer 20% or more (NEDO, 1982 : 11) . In the absence of an effective secondary market in deleted items in Britain, the risk of ending up with a large portion of unsold stock increases in this situation . In this volatile market of fashion clothes, therefore, high-street retailers prefer to source near the market . It is difficult for the large-scale garment manufacturers in the Far East to be responsive, either in design or colour terms, or in speed of delivery, to the fashion requirements of a remote market . But most of all, ordering in advance from the distant corners of the world may involve retailers in the high cost of holding unsold stock of out-of-fashion clothes (NEDO, 1982 ; Greater London Council, 1984(d) : 24) . These considerations may perhaps explain why, in spite of an overall rise in the level of imports in garments from 1979 to 1983, individual retailers achieved significant reductions in their dependence on imported items over the same period . For example a major department store reduced its imported clothing by 36% between 1981 and 1983 (Ward, Randall & Kromar, 1984 : 2) . Dependence on home-based manufacturers has been specially more marked among stores in the fashion sector of women's clothing (Yeo & Wee, 1984) .

Clothing industry

Preference for domestic sources has not changed the relationship between the oligopolistic retailers and the numerous suppliers who compete with one another for their custom . The rules of the game, if anything, have become more severe with the changes in strategy, where high-street retailers are in a position to transfer almost all the risk of a changeable market to the domestic manufacturers : Retailers are less willing to make long-term commitments . . . they are moving away from a CMT (Cut, Make and Trim) arrangement for garment manufacturing, in which the retailer buys the fabric and allocates it to garment suppliers, towards the system where the retailer still approves the fabric but the placing of orders is in the hands of the garment manufacturers, who thereby carry more of the risk . The retailers are also encouraging more garment manufacturers to find their own fabrics and produce garments from them . This again means more risk for the garment manufacturers, who have also to take on more of the functions of fabric quality control . . . Retailers are also withdrawing to an extent from detailed specifications for garments . . . they wish to ensure the quality is maintained, but also wish to develop more remote means of doing so effectively . (Most of all), retailers are tending to order in smaller batches on shorter lead times, again to protect themselves from fashion changes . (NEDO, 1982) In this changed situation, the dominant strategy, even for big companies like Tootal, is to shift from being a productionoriented company to becoming a marketing company, developing links with fresh markets and staying abreast of fashion changes (Moreton, 1984(a) ) . Thus it is in the interests of big retailers to have access to multiple sourcing domestically . To quote Rainie, `for a large retailer, the existence of an individual small supplier is not of any great consequence . The existence of a number of them is' . The same logic applies to the manufacturers . As the number of subcontractors increases, the risk of fashion changes can be relegated to the next in the line . The smaller units can also successfully avoid the labour legislation regarding the hiring and firing of the workforce, as well as the factory legislation regarding health and safety . Moreover, in smaller units the extent of unionisation is small (Murray R ., 1983 : 13) . Access to a captive labour force, who are willing to work under such conditions, is the major qualification for survival in such a context . Ethnic minority entrepreneurs definitely have a competitive edge over their white counterparts in this respect . They can make use of the cheap labour of their women, who have very little

53

Clothing industry

55

opportunity to find jobs elsewhere . Intensive use of female labour is the cornerstone of the burgeoning ethnic economy, here as elsewhere in Europe, but this fact gets only tangential reference in the thriving literature on the ethnic economy . Apart from the numerous articles in the newspapers on the success of Asian entrepreneurs (see for example The Sunday Times, 2 October 1983), there has been a series of exploratory researches into the phenomenon of ethnic business in the UK, as elsewhere in Europe, mainly under the auspices of the ESRC Research Unit for Ethnic Relations at Aston University (Ward & Jenkins, 1984) . The plethora of viewpoints that this collection of essays displays is impressive . However, none of the contributors explores the role of ethnic business in the overall pattern of subcontracting, that links the rise of small businesses to a changing business strategy on the part of the large corporations . This link, however, is crucial for understanding the position of female immigrants, such as homeworkers, in the present economic system . The effective use of a flexible and non-unionised labour force is, as I have argued, a necessary condition for survival in the cutthroat competition among subcontractors today . The ideology of the extended family among Asians, or of village and ethnic loyalty among Cypriots, provides the ideal situation for recruiting such a docile and cheap - and overwhelmingly female labour force . It may not be an accident that these two migrant communities are particularly involved in the clothing trade . In fact, the integration of migrant women into the capitalist system is bound up with the traditional values of the immigrant communities, who are keenly concerned about the `Ijjat' or `Filotimo' (honour) of their women . The clothing trade proved particularly attractive to Asian and (Greek or Turkish) Cypriot women on their arrival in Britain, as it provided them with the choice of working in the factory or at home . The working conditions at the factory were often seen as an extension of home . `The fact that recruitment to a factory was usually on the basis of personal recommendation, and that the employees therefore tended to know each other or be related, facilitated this change of attitude (among husbands) . Husbands were less likely to object to their wives working outside the home, if they were in a "safe" environment' (Ladbury, 1984 : 111) . The employment relationship was also regarded as a traditional obligatory relationship rather than a pure contract . As an Asian employer views the situation : I see the majority of women working for me as benefiting from my job offer . They are all illiterate and have no skills, hence no British factory will make use of them . . . I see

The rise of ethnic business

Capital & Class 56

myself providing a little extra for them ; a place of work where they meet women in similar situations as themselves . Their £20 a week will help towards the family income, and we are like a big family here . (Hoel, 1982 : 86) Ethnic and familial links help to keep the wages low . Also a sense of exclusion from the primary job market leads to a dependency relationship between the women and their ethnic employers, from whom they are compelled to accept exploitative wage rates, ethnic ties notwithstanding . In the sixties and up to the early seventies, when the market was good, working for ethnic employers did not prove to be too unattractive financially . Although piece-rates were low, payments were often made in cash (Mitter, 1983 ; Anthias, 1983 ; Shah, 1975) . However, in terms of payments and job security, there was very little difference between working in smaller, often unregistered companies, and working from home . The workers were never clear about their status as employees, and the questions of taxation and national insurance contributions were hardly raised . Starting a factory or sweatshop was more of an organic development than a calculated decision: Mr A, who had been in the trade for several years, said that, as soon as he had started work for a general manufacturer, he had begun saving for a machine of his own . Once he had achieved this, his wife started working at home . This process of saving and buying continued up to the present position of having five machines . Mr A was obviously well pleased with his business acumen and thought it perfectly natural that the joint family system (they all lived in the house) should be extended to the working environment . Mr A claimed he did not know that planning permission was needed, but it was also apparent that no consideration was given to National Insurance stamp or tax . (Shah, 1975 : 26) Even in a registered ethnic factory, the common practice is to declare a low wage or low hours of work for the employees . Thus women who work - usually 36-40 hours a week or more may be registered only as part-time workers, with all that this implies in terms of non-payment of tax, or National Insurance contributions, and avoidance of workers' rights to redundancy payments . The method of `clear money' - an undeclared part of wage payment - is the most common way of reducing the overhead costs . Semi-clandestine activities are made easier by the `family' environment . Reliance on one's own community also reduces the possibility of unionisation . Although working for a capitalist economy,

Clothing industry

the workers are tied to their employers by an extra-economic bondage . It is an uphill task to unionise them . In a hostile white world, many of the immigrant women are afraid to incur the wrath of `their own men' . In an economy where the employeremployee relationship is underpinned by the ethnic and familial network, a woman may find it difficult to get work if she is identified with `disruptive' or `unionised' elements (Anthias, 1983 : 84) . The servility, subservience and passivity that the communities expect of wives towards their husbands, daughtersin-law towards fathers-in-law in the home, were reproduced to an important extent in factories (Hoel, 1982 : 89) . As women are recruited through friends or relations, a direct telephone-call to a husband, father or uncle is often enough to suppress rebels . Ethnic employers have also turned to their own associations (such as the Dressmakers' and Allied Contractors' Association among Cypriots), that are used to control the female labour force effectively (Haringey Employment Project, 1980 : p . 18) . It would be unfair to attribute the rise of sweatshops and homeworking in these communities solely to the patriarchal values of Asians or Cypriots . The pattern of immigration, racialism in the host country, and the subsequent levels of unemployment among immigrant men are major factors explaining the growth of the grey economy in the clothing sector . From the early sixties, the clothing trade in the East End, for example, relied heavily on the Bangladeshi men who came to the UK, initially without their families, and joined the rag-trade with great zeal . Mostly employed as outworkers, in small workshops, their role in the trade was increasingly marginalised . Unskilled, repetitive jobs, gradually discarded even by indigenous white working-class women, were given to Bangladeshi men . Their position was hardly better than that of homeworkers . Patrick Duffy documented vividly, in his unpublished report, the position of immigrant workers in a white-owned clothing factory in 1979 : The factory was divided into three separate sections, each in its own building . One of these buildings was used as a cutting room, where there were six white cutters . The cutters were weekly paid . Another building, with perhaps 40 to 45 workers, performed the specialist machining, finishing, and top pressing functions, producing the racks of garments ready for dispatch . These workers were racially mixed, with perhaps half of them Bengalis . The employer said they were weekly paid . The third building, the `machine room', was occupied by about 45 young Bengalis, all engaged in flat machining

57

Capital & Class 58

ready-cut work from the cutting room, which was later passed to the finishing room . The premises belonged to the employer, the machines belonged to the employer, the work belonged to the employer, but none of these Bengali machinists were actually employed by the firm . They were divided into several `units', each with one of the Bengalis as a `governor', who was responsible for negotiating for batches of the ready-cut work on a sub-contract basis from the cutting room . These machinists were paid on a piece-work basis, by their respective `governors' . The `employer' has no legal responsibility for any of these workers . Asked what happened when there was a shortage of work, the `employer' replied that it was not his problem : `that is up to them', he said . As they were not employed by him, he did not have to make them redundant . If there was no work, there was no employment . (Duffy, 1979 : 36) The white workers were incessantly suspicious of the Bangladeshi workers : . . . the white cutter complained that the Bengalis claimed tax allowance for their children in Bangladesh . Somewhat inconsistent with this remark was his further claim that `they don't pay tax' . . . The man further contradicted himself when he remarked that `they have accountants who come in . . . but they are Indian too' . (p . 37) In this hostile environment, the obvious survival-strategy of the immigrants will be to set up on their own, utilising the safe inputs of ethnic and family labour . The arrival of immigrant women, especially from the Asian subcontinent, coincided with the rapid rise in unemployment among black male workers . Since unemployment hit the black community hardest, its members had to look for alternative ways of surviving . As the Department of Employment study shows, the level of unemployment is at least twice as high among blacks as among whites in each age-group and for both sexes (Employment Gazette, 1984 : 261) . Asian women appear to be worst hit by unemployment, even among black women workers . The fall in the employment opportunities of black men and women in the primary job market has led to a growth in the level of self-employment, specially among Asian men and women, and to an increase in homeworking (generally treated by employers as `self-employment') (Mitter & Heery, 1985 : 18) . The increased incidence of self-employment, with the consequent insecurity of pay and absence of rights enjoyed by employees, is not just a



Clothing industry manifestation of self-help and belief in competition among immigrants ; in many ways, it is a measure of utter desperation . The cheap labour of black and other minority women (notably Cypriots) in home-based production has become the basis of a growing sweatshop economy . Some ethnic manufacturers may rely almost exclusively on the labour of women and young people in a particular community, and draw on community links in order to replace or add staff as necessary . Access to cheap female labour, normally at extremely low rates of pay, is often the only advantage these employers have over their white counterparts . In most cases, ethnic business represents `a sideways shift from lumpenproletariat to lumpenbourgeoisie' (Aldrich et al, 1984) .

In the eighties, the role of the ethnic economy has become of increased importance in the clothing industry . The advance of information and computer technology, and a fall in the wagelevel in the underground economy, brings some of the `runaway' capital home . The integration of immigrant women into the industry in this context becomes especially significant . But this phenomenon has been associated also with some pronounced structural and geographical relocations of the labour process . First, in the inner city areas of London, a substantial number of jobs are being transferred from the factories and sweatshops to homeworkers . Vassilos Mavrou, who has done a thorough survey of the structure of the clothing industry in the Cypriot community for the last five years, has found a steady shift of work to home-based workers . In a community where more than 20,000 Cypriot women are employed in the clothing industry, the ratio of homeworkers to factory workers, on a rough guess, has shifted from 40% of the total workers in 1979 to 60% today (interview with V . Mavrou, October 1984) . Here both economic and non-economic factors have played a part . In an economic environment where pressure on profitmargins is acute, some of the costs that one has to incur even in a small unit (such as electricity, or rental of machines) can be relegated to the worker, if work can be transferred to her home . Also, it is easier to avoid the scrutiny of the Inland Revenue and VAT people by relying more on the invisible workforce . In the winter of 1981-1982, for example, the Inland Revenue Fraud Squad became especially active in North London, in a campaign against payment of `clear wages' and tax evasion (interview with Chris Wilson, NUTGW, 1983) . The pressure on Cypriot manufacturers to pay their backlog of tax became intense . Not surprisingly, a number of them went into `liquidation' within six weeks of this campaign and came back on the scene later with a new

59

Shifts towards homeworking

Capital & Class 60

name . The ease of going `insolvent' is notorious in this business (Portus, 1983) . However, there are talks of tightening up the law (Wallington, 1984 : 1444-1456 ; Insolvency Law and Practice, 1983), and malpractices at the factory level are now attracting the attention of the authorities . Thus it becomes less hazardous for , employers to reduce the permanent workforce to a minimum . With recession and a decline in work opportunities elsewhere, any dispute between competing ethnic communities carries the risk of bringing malpractices to light (Shuster, 1983) . It is generally agreed, therefore, that whenever it is possible to `put out' work, it is sensible to do so . In certain areas, the effects of `putting out' have been sharp . In March and April of 1981, the factories around Brick Lane were closing in large numbers (Birnbaum et al, 1982) . The effect of such closures on the Bangladeshi community was traumatic . The level of unemployment among the males was ranging between 60% and 70% . Since most of them worked in the rag-trade, and since most of them had only informal contractual relations to their employers, it became a daunting task for the Bangladeshi men to ask for state benefits . Most of them had never paid tax or National Insurance contributions, hence they had first to prove to the authorites the legality of their status . As the men struggled to adjust to a changing situation, Bangladeshi women experienced a rise in the supply of 'machining' work coming to their homes . In many families, women became the major breadwinners . A newly-acquired economic power altered the balance of power between genders even in the Ijjat-conscious community - but only slightly . In most cases, husbands became the middlemen between the homeworkers and the subcontractors (Mitter, 1984) . Businesses based on the community and family links resulted in new locations of production as well . From the late seventies onwards, the West Midlands have become another main centre of small ethnic clothing firms, mostly owned by Asian manufacturers . In this area, as Asians gradually lost their jobs in the decimated foundries of the Black Country, they looked towards self-employment as the way out of their bleak conditions . The redundancy money, combined with savings and money borrowed from the community, helped them to set up small clothing factories where the initial capital cost is really low (Low Pay Unit, April 1984(a) ) . At current prices, it would cost £2,500 to purchase five industrial sewing machines ; these can produce up to 2,000 garments per week . As a result, there has been a massive growth of small clothing firms, whose total workforce in the West Midlands would be around 20,000 . A significant number of firms employ as few as six women, but most average about 30 . Many



Clothing industry 61

are unknown to the authorities and some sweatshops move sewing machines from one derelict building to another to avoid detection (The Observer, 13 May 1984) . Links between small factories and the London retailers are often direct . `Having bought their own designs, cloth, thread and buttons, the retailers and their consultants bring the garments from London to the West Midlands for assembling . The small manufacturers may in turn pass the work on to homeworkers' (Low Pay Unit, 1984(a), p . 13) . At least 100,000 garments a week flow from the Midlands to the London retailers . The breakdown of costs by the Low Pay Unit shows that a garment selling at £11 .99 gives the retailers a £6 profit and an Asian machinist between 15p and 75p, depending on the difficulty of the work done, and on whether it is carried out in a factory or at home (Low Pay Unit, 1984(a), p . 13) . Homeworkers receive significantly lower rates of pay than the workers at a factory . They are usually given the simplest work, because their machines are more basic . Also, they often assemble only part of the garment, which is then finished in the factory . This means that they have to work even harder to earn a small amount of money . A variety of sources strongly suggest that in the small units of the West Midlands a typical wage is around £1 per hour, just £40 for a 40-hour week . However, earnings, especially of homeworkers, can be much lower than this . `Not even Hong Kong or Taiwan could compete at these pay levels, according to trade sources' (The Observer, 13 May 1984) . Here again, machinists in the ethnic clothing firms are almost invariably women . Even with rising unemployment, it is rare for an Asian or Cypriot man to take up machining as a livelihood . In the West Midlands, as in London, recruitment takes place from the unorganised part of the labour market, and this means from the immigrant communities .

This confined labour market gives some immigrant male entrepreneurs a competitive advantage . It is considered `normal' for an immigrant woman, on the other hand, to be just a worker : in her cultural milieu, it is often accepted as desirable for a woman to work - if not in a strictly supervised ethnic factory - from the confines of her home . Hence the ethnic economy throughout the UK is marked by a clear division of labour along gender lines . Unskilled, repetitive, machining work gets done by women from small units or from home - whereas entrepreneurial skill is being practised and monopolised by men . (Similar are the experiences in Italy-see Solinas, 1982 : 345 .) The price that the migrant women pay, in terms of health

Why women? The myth of pin-money

Capital & Class 62

hazards and safety, is often high . Being for the most part unregistered, they are likely to be unaware of any protection that the Health and Safety regulations offer . Nor are the workers in sweatshops in a better position . According to the present law, registration with the Factory Inspectorate is not needed . The fire service inspects factories only where more than 20 people are working . Accidents that result from working in sweatshops and homeworking accordingly affect mainly migrant women . Incidents, such as that reported below, reveal a common pattern of organising production and the dangers that may follow from it : Six members of an Asian family . . . died when an explosion and fire destroyed their home in Gravesend, Kent . . . The family had only moved from the Midlands some four months ago and were thought to be operating a small shoe manufacturing business from the premises . . . The victims were Jagir Kaur, aged 48, her daughter 19-year-old Disho Kaur, daughter-in-law Manjit Kaur and grandchildren . . . the blaze was intensified by quantities of glue, plastic and compressed air stores in the small workshop . (The Guardian, Monday 7 November 1983) This piece of news appeared a few days after the reporting of a similar accident in the East End of London : The five women who died in a clothing factory fire in East London on Wednesday, worked in premises which had not been visited by fire prevention officers or factory inspectors . . . The factory, D . K . Netwar, of Mile End Road, was owned by members of an Indian family, including Mr Gurdev Singh . The dead women had not all been named last night but they were understood all to be Indians, some of whom might have been related to Mr Singh . . . Two of the victims were identified last night as sisters, Baksho and Vidya Kaur . . . (The Times, Friday 28 October 1983) It is not surprising, therefore, that women, especially black women, are trying to make the issues of the sweatshops and homeworking visible . It is the invisibility of this particular form of organisation of production that makes the worker so pathetically vulnerable . The task, however, is not easy . Any discussion of homeworking inevitably provokes two contradictory and emotional responses - either an adulation of the closely-knit Asian family, where women willingly offer long hours of work to a family business (The Sunday Times, 2 October 1983) or a hysteria about the Asian sweatshop and slave labour (The News of the World, 18 December 1983) . The truth is that the expansion of ethnic businesses, in the

Clothing industry

twilight area between the regulated and the unregulated economy, is the outcome of a hierarchy of exploitation and of an intricate interrelationship between ethnicity and the sexual division of labour . The ethnic subcontractor himself is frequently in a weak position in relation to the big retailers and manufacturers, handicapped as he is with his language problem and his status as an immigrant . His survival often depends on his ability to exploit his own family or community labour . Trapped between the racism of the host community and the sexism of their own, women of the ethnic minorities offer the advantages of third world labour in the middle of the first world (Mitter & Van Luijken, 1983) . Working for the garment industry does not alleviate a woman's duties as a mother and as a wife, even when she is at work . Her double day consists of working for the employer as well as for the family . She does not have the freedom of going out to work, she does not have a room set aside for her work . Often she works in the corner of her living-room or in the kitchen . She suffers inevitably from stress and overburdening (Mitter & Van Luijken, 1983 ; Outworkers' Own, Issue 7 :4) . The health hazards of such work are high, both to the workers and to the children . Byssinosis ('brown lung') is a common ailment, that arises from constant exposure to cotton dust . Chronic asthma is often the manifestation . But the ailment, like the cause, remains invisible to the world outside and receives little publicity . It would be wrong to assume that immigrant women work for 'pin-money' . In a changed economic situation, when the level of unemployment is particularly high among immigrant men, a woman homeworker can be a major, if not the sole, earner in the family . A documentation of Asian homeworkers in Leicester (Table 1) shows a pattern not dissimilar to that found with English homeworkers (Allen, 1983 : 658) . The majority of interviewees said that the money earned from outwork was essential to the family budget and went on basics, such as mortgages and children's clothes . In one case, it was the only income for the whole family . In interpreting the results of this very small sample from Leicester, one has to remember not only that these eight homeworkers represent the `tip of the iceberg', but that they are probably among the less vulnerable ones . The workers who are most exploited are often those who are most desperate for work and most afraid of losing it . They are thus the least likely to agree to be interviewed . But even in the cases recorded in the interviews, language problems and cultural constraints made the women vulnerable to malpractices of the employers . Two of the employees, for example, were allegedly having their tax deducted, when they were in fact below the tax

63

Capital & Class 64 Table I A profile of eight Asian homeworkers (machinists) in Leicester (March July 1982) Section I - Hours of work and earnings

Outworker 1 2 3 4 5 6 7 8

Average pay per hour 23p 40p £1 .80p 70p 70p 50p 90p £2 .00p

Average rates

90p

Hours per week

Average weekly pay Deductions

55-60 30-45 40-50 15-35 30-35 80-90 30-35 30-40

£12 .50 £15 .00 £72 .00 £14 .50 £23 .00 £35 .00 £31 .00 £65 .00

48 hours

£33 .50

Tax Machine rental £4 Tax and NI None Machine rental £4 None Tax and NI

Note : All homeworkers paid for their overheads : electricity, heating, lighting and telephone . Estimated cost is £5 a week on average . Section II - Patterns of expenditure

Outworker

Average weekly income from outwork

1 2

£12 .50 E15 .00

3

£72 .00

4 5 6

1:14 .50 £23 .00 £35 .00

7

£31 .00

8

£65 .00

Wages from outwork used for

Main items of expenditure (apart Husband's weekly from normal wage household bills)

Housekeeping Not known Children's clothes Unemployed benefit Everything Unemployed - only income - not on benefit Essentials £75 .00 Essentials £100+ Essentials £45 .00

Clothes and essentials Savings

Mortgage

£100+

Mort'" ge Mortgage Mortgage Support for mother-in-law in Bangladesh £ 100 per month Mortgage

£95 .00

Mortgage

Source: Work with Asian Outworkers, report by Leicester Outwork Campaign, 1982 .

Clothing industry threshold (Table 1) . In my own fieldwork in the East End in September 1982, I found that women were contributing substantially to the family budget, now that their men were either unemployed or dependent on casual employment in the clothing or the hotel/catering sector . Nine families, that I documented in September 1982, are typical of many that I visited in the East End between January and September of that year (Table 2) . Fear of the authorities and the language barrier often made it difficult for Bangladeshi men to claim state benefits ; benefits in the form of family income supplements and rent rebates also went unclaimed . In some cases, as Table 2 shows, the earnings from homeworking and contributions from near relatives were the only forms of family income . The rates of pay varied considerably, reflecting the skills of the machinists and the relative bargaining power of the worker . It was not uncommon to have male members resorting to homeworking as well . But in the majority of cases, male members of the family became the middlemen or contact people who brought work home . The rates of pay were negotiated by the male members as well . In this situation, being a wage-earner only marginally altered the woman homeworker's position in the family - even when her income provided the major share of the family earnings .

How many of them? Even if one accepts that earnings from homeworking do not represent just 'pin-money' to immigrant women, the phenomenon of homeworking may still be pushed aside as an intractable problem in the absence of some quantification . Even a rough calculation may, therefore, be an improvement over anecdotal evidence . In view of the largely invisible nature of this labour force, it is impossible to have direct quantification . As in the case of labour in the underground economy in general, the quantitative `guesstimate' of homeworkers can be made only by looking at the discrepancies in different series of employment figures as compiled by the government (Mattera, 1985, chapter 2) . The Census of Employment figures of September 1981, for example, show that London has registered employment of some 29,000 people in the clothing industry . The figures represent only registered full- or part-time employees . This leads to a gross underestimate, because, as we have seen, the industry in London uses a large pool of self-employed and unregistered labour, often working from home, which does not appear in these figures . This noninclusion might well explain at least a part of the discrepancy C&C

27-E:

65



Capital & Class 66 Table 2 A profile of nine Bangladeshi women homeworkers in the East End of London : family structures and earnings, September 1982 Section I - Structure offamily

Length Marital Age of stay status

Number of Number of Employment other homechildren Number of status of the workers in under 12 in additional male head of the family Middleman or the family adults family Male Female contact person

1

15

9

Unmarried

5

2

Occasional employment in catering

1

Father

2

17

5

Unmarried

6

2

Unemployed, 1 not on state benefits

1

Father

3

23

7

Married

2

3

Unemployed, not on state benefits

1

Uncle and husband

4

24

8

Married

2

2

Outwork and casual jobs

5

25

8

Married

3

1

Unemployed, on state benefits

-

6

28

10

Married

4

2

Unemployed, not on state benefits

1

Husband

7

30

10

Widow

4

1

1

Family friend

8

37

13

Married

6

2

1

Family friend

9

45

15

Divorced

1

1

1

Uncle

Unemployed, 1 not on state benefits

Husband

Uncle



Clothing industry

67 Section II - Earnings and expenditure of the families of homeworkers

Hourly rates of pay 1 2 3 4 5 6 7 8 9

50p 80p 80p 1:1 .20p 75p £1 .20p 0 .10p £1 .00p £1 .30p

Total earning of the Hours homeworker worked £ 25 40 30 25 25 28 40 30 50

12 .50 32 .00 24 .00 30 .00 18 .75 33 .60 44.00 30 .00 65 .00

Total earning of the Total earning of family (including state the family from benefits, casual job & help from relations homeworking £ £ 35 .00 152 .00 64 .00 30 .00 18 .75 79 .00 84 .00 160 .00 85 .00

105 .00 182 .00 108 .00 120 .00 110 .00 100 .00 100 .00 170 .00 90 .00

Earning from homeworking as a percentage of total earning 33 83 61 25 5 .8 79 84 94 94

Notes: Table of earnings and expenditure is based on my informal and fragmentary discussions

with justifiably reticent homeworkers . In most cases, the overhead costs were paid by the homeworkers out of their own earnings .

between the census figures and the Labour Force Survey figures of 1979, that gave 60,000 London residents as being employed in the clothing industry . According to the Greater London Council, homeworking and unregistered employment may contribute as much as 40% of the total employment within this industry in boroughs like Islington (Greater London Council, 1984(a) : 14) . On the basis of this, GLC estimates that a more accurate figure of employment in this industry in London in 1981 would be 58,000, nearer the Labour Force Survey figures for 1979 . However, even the Labour Force Survey may underestimate the number of total workers in the clothing industry . Many homeworkers may not declare themselves as workers, partly because of their fear of officialdom, and partly because often they fail to see themselves as `workers' (Martin & Roberts, 1984 : 9) . If the above discussion indicates the widespread prevalence of unregistered and self-employed workers in the industry in the inner-city areas, there are signs that the use of such labour is still rising . There are some trends in the official statistics themselves which may be interpreted as indicators of a shift from factory

Capital & Class

68 Table 3 Output and employment in clothing industry Output and import penetration 1979-1983 Section I - Output at current prices . Unit = £m . Import penetration = as a percentage in brackets.

Items Women's and girls' light outerwear,

1979

1980

1981

1048 .6

1081 .8

1048 .1

1982

1983

1112 .91

1157 .91

lingerie and infants' wear (AH 4536)

(19 .0)

(18 .8)

(23 .0)

(22 .6)

(22 .6)

Weatherproof outerwear

168 .3

181 .0

156 .1

165 .9

183 .3

(AH 4531)

(32 .1)

(32 .0)

(41 .3)

(39.9)

(33 .5)

nightwear . Work clothing and men's and

510 .7

491 .6

459 .3

492 .6

547 .1

boys' jeans (AH 4534 + AH 4535)

(32 .8)

(35 .7)

(37 .2)

(35 .7)

(32 .8)

Men's and boys' tailored outerwear

558 .3

532 .2

492 .1

481 .2

432 .2

(AH 4532)

(27 .3)

(27 .5)

(31 .6)

(33 .8)

(43 .4)

Women's and girls' tailored outerwear

473 .0

465 .7

454 .2

482 .4

447 .1

(AH 4533)

(23 .9)

(24 .1)

(29 .3)

(29.5)

(33 .5)

Foundationwear, swimwear and

238 .4

259 .6

270 .6

280.0

328 .2*

miscellaneous (AH 4539)

(25 .3)

(22 .9)

(26 .5)

(28 .5)

(29 .7)

2995 .0

3095 .8

(29.6)

(30 .7)

Mens' and boys' shirts, underwear and

Totals

2997 .3 (25 .4)

3011 .9 (25 .6)

2880 .4 (29 .7)

*Note: Standard Industrial Classification has been recently revised and from 1983 onwards, statistics from the clothing industry are collected under seven Activity Headings (AH) . The revision has an important effect on AH 4539 - Miscellaneous Dress Industries has been extended compared with MLB 4491 - Corsets and Miscellaneous Dress Industries . This partly accounts for higher figures for output and employment . Source : Data compiled by British Clothing Industry Association, 1984, from Business Monitor Quarterly Statistics and Bulletin of Textiles and Clothing Statistics .

Clothing industry 69 Section II - Output and employment (a) Output at 1980 constant prices . Unit= £m (b) Registered employment . Unit = thousand (c) Implied employment at constant 1978 average labour productivity . Unit = thousand (d) Residual employment = implied employment minus registered employment (unit = thousand)

1979

1980

1981

1982

1983

1146 .0 93 .9 100 .4 6 .5

1081 .8 81 .5 94 .7 13 .2

1028 .6 76 .9 90 .1 13 .2

1046.9 74.4 91 .6 17 .2

1039 .4 77 .9 91 .0 13 .1

192 .8

181 .0

15 .2

13 .3

147 .3 11 .9

153 .9 11 .8

156 .5 12 .6

560 .6 39 .1

491 .6 34 .1

456 .8 31 .4

478 .3 31 .7

510 .3 34 .9

(a) Output (b) Registered employment

627 .3 58 .8

532 .2 42 .3

475 .5 35 .6

452 .3 33 .5

387 .3 35 .8

Women's and girls' tailored outerwear (Ax 4533) (a) Output (b) Registered employment

528 .5 35 .6

465 .7 28 .3

444 .9 26 .0

431 .7 25 .7

406 .1 22 .2

Foundationwear, swimwear and miscellaneous (Ax 4539) (a) Output (b) Registered employment

272 .1 29 .9

259 .6 26 .2

250 .3 22 .6

242 .2 21 .3

269 .5 29 .6

Items Women's and girls' light outerwear, lingerie and infants' wear (Ax 4536) (a) Output (b) Registered employment (c) Implied employment (d) Residual employment Weatherproof outerwear (Ax 4531) (a) Output (b) Registered employment Men's and boys' shirts, underwear and nightwear, work clothing, and men's and boys' jeans (Ax 4534 + Ax 4535) (a) Output (b) Registered employment Men's and boys' tailored outerwear (Ax 4532)

Source : Data compiled by British Clothing Industry Association, 1984, from Business Monitor Quarterly Statistics and Bulletin of Textiles and Clothing Statistics .

Capital & Class 70

employment to employment in home-based units and sweatshops . For a rough and ready exercise, I have focussed my calculations on only one segment of the clothing trade - women's and girls' light outerwear, lingerie and infants' wear (AH 4536 according to the revised Standard Industrial Classification) which is generally referred to in the industry as the fashion trade . This trade is particularly important in the inner-city conurbations of London and the West Midlands, and it is in this segment that small-scale ethnic entrepreneurs are specially involved . In terms of output, this trade accounts for 33% of the total domestic output of the clothing industry in the UK, and in this particular area, the import-penetration seems to have been effectively halted since 1982 (see Table 3, Section I) . Significant changes in the average labour productivity are, for the reasons explained before, highly unlikely in this area where large numbers of small firms predominate and where the proliferation of sweatshops has been particularly acute . Although there have been introductions of labour-saving innovations and intensification of the work process in some firms, overall average productivity could not have risen much in this sector since 1978, especially in view of a sharp decline in the level of capital investment in the garment industry (Hoffman & Rush, 1985) . Table 3, Section II shows the number of employees that would be needed in the sector in the years following 1978, assuming a constant level of productivity . The discrepancy between the implied levels of employment and registered levels could imply a transference of jobs from the factory to the sweatshops and home-based sector . For 1983, the figure implied by the evidence of production would be 91,000 people . The recorded level of employment in that year is 77,900 people . The difference, 13,100, can be interpreted as indicating the numbers who have shifted from factory to home or sweatshop work since 1978 . One should, however, interpret the residual employment figure with caution . To start with, one must allow for the parttime employment in the trade ; in fact, a constant or increased volume of output can be produced by a smaller number of people, even with productivity remaining constant, if the proportion of part-time employees in the trade declines . The registered female part-time workers as a proportion of the total `employees in employment', however, has remained more or less constant around 10% in this industry (Table 1 .4, Employment Gazette, Annual Data) . The figures also have to be adjusted for the levels of efficiency and productivity of the outworkers as against those of the inhouse factory workers . The Department of Employment study of September 1982 concludes that `the "below ordinary" workers

Clothing industry constitute a fairly large subgroup among the homeworker machinists (17 per cent) ; however, if one excludes these workers, then the sample in the study indicated the homeworkers to be very similar to inworkers, and even to be the most productive group' (Hakim, 1982, p . 372) . There are observations contradicting this as well . Ewing states, for example, that `most homeworkers are unlikely to reach the standard of ordinary workers because of the difficulties of establishing suitable working conditions in the home' (Ewing, 1982, pp . 101-102) . However, even if the intrinsic efficiency of both the groups is the same, the general belief in the trade is that the levels of output per outworker on average tend to be 30% less than those of a full-time worker in the factory ; this is because many work on a part-time or irregular basis . Assuming that to be a realistic supposition, employment in the home-based units and sweatshops may by 1983 have increased by 17,030 over the 1978 base figures . A sudden drop in the residual employment in 1983 (Table 3, section II) points to an easy transition between the factory work and outwork in this industry . The figure quoted above, one must remember, relates only to one sector of the clothing trade . In some other areas of the industry, such as sportswear (AH 4531 in Table 3), homeworking and ethnic labour in sweatshops, although not as widespread as in the women's lightwear sector, are also regularly used ; casual labour is on the rise in these areas as well (The Observer, 13 May 1984) . Again, clothing is only one of many traditional manufacturing industries where the use of homeworking is increasing . Quantification of the size of this labour force will be possible only with the allocation of greater resources to grassroots researchers whom homeworkers can trust . In the absence of such resources, the researchers tend to feel that, `for every homeworker we talk to, there are many others we never know . This "invisible workforce" provides the lampshades that we buy from stores on the high street, dresses, blouses, electrical goods, stuffed envelopes, painted toys, zips and many other goods' (Greenwich Homeworkers' Project, Annual Report, 1984 : 2) . The production of these goods utilises home-based labour of white indigenous women workers as well (Allen, 1983 : 638) . However, AfroCaribbean and Asian women are more likely to be homeworkers, as they are more commonly excluded from the primary market . But they are the least likely to appear in a survey, even in the borough of Southwark where there is a large black population and where black women are known to be engaged in homeworking on a considerable scale (Table 4) . If figures analogous to those I have calculated for the women's lightwear sector are accepted as a rough guide, then the Department of Employment's official

71



Table 4 Invisibility of black women: sample of Southwark homeworkers interviewed

Sex

Children

Ethnic origin

Type of work

Rate of pay

Outgoings extra electricity

Hours and days worked

Employment status

120 hours per week, 7 days

don't know

Homeworking in 1980-health problems

Comments

1 Woman 2 pre-school

Turkish

Machining skirts

13-22p per skirt

2 Woman 2

English

Typing labels, envelopes

Varies : 17p, 51p extra electricity or 117p per hour telephone calls

30 hours per week, 7 days

don't know

Homeworking for 27 years, disabled, irregular work

3 Woman 3

Greek

Machining dresses

60p or 80p per extra electricity dress

14 hours per day, 7 days

don't know

Rate of pay was reduced last year . Has health problems

4 Woman 2

Portuguese

Tailoring/ alterations

varies - per article

works mornings don't know also -4pmto lam, 7 days

Health problems : backache and pains

extra electricity travel costs collect/deliver



5 Woman 1 baby

English

Toys

Hourly rate

none

To suit

employee

Works in a co-op - equal status with others

6 Woman none

Irish

Hand knitting

50p per ball of wool

extra electricity telephone calls

Most of day 7 days

don't know

No extra for finishing . Irregular work

7 Woman 1 baby

Portuguese

Bow making

13p per 100

extra electricity

All day . 7 days

don't know

Did homeworking - no nursery for baby

8 Woman 2

Turkish

Soft toys

2p per item

extra electricity

lam to 7pm 7 days

don't know

Now given it up mother and sister doing homeworking

9 Woman 1

English

Typing

£3 .50p per hour

extra electricity telephone calls

Irregular

employee

Works for a private consultant

10 Woman 3

Portuguese

Machining dresses/skirts

25-50p per skirt ; 50-80p per dress

extra electricity

10-12 hours, 7 days

Problems with told she was self-employed health because of fabrics

11 Woman Grown-up

English

Folding and glueing files

Varies : 50-95p extra electricity travel costs per 100 collect/deliver

Long hours when work available

casual

Source : Homeworking in Southwark : A Report from Southwark Employment Unit, 1984

Pensioner-very messy work

Capital & Class 74

estimate of 72,000 homeworkers in the manufacturing sector in the UK as a whole, may well have to be changed . In the light of the Greater London Council report on London's Clothing Industry (Greater London Council, 1984(d) ) and the findings of London-based Homeworkers' Projects (Greater London Council, 1985(a), chapter on homeworking ; 1985(b) ), it would be more realistic to suppose that the official estimate of 72,000 for the country as a whole is approximately correct for London alone . More detailed research on this question is urgently needed . It might be claimed that, in a workforce of 23 million workers, even if we were able to treble the official estimate of homeworkers, the figure would still be relatively insignificant . One must remember, however, that it is not the absolute number that is important . That manufacturing homeworking is on the rise assumes special significance at a time when labour force surveys indicate a dramatic decline in manufacturing employment in the primary sector . Also, as we have argued above, we cannot assume, as the Department of Employment does, that the new technology and white-collar homeworkers have already outnumbered the manufacturing homeworkers . In certain sectors, the impact of the transference of jobs from factory to homeworkers (registered and unregistered), and to the workers in sweatshops, has been such that it has possibly had an even greater effect upon factory employment than import penetration has had . In Table 3, Section II, for example, the decline in the registered factory employment of the fashionwear sector between 1979 and 1983 has been 16,000 (from 93,900 to 77,900) . At a constant 1978 level of labour productivity, the number of people needed to produce the output of 1983 would have been 91,000 . The loss of jobs due to import penetration, one can argue, is merely 2,900 (i .e . 93,900 minus 91,900) . The remaining 13,100 job losses are most likely to represent a shift from the official to the hidden economy of homeworking and sweatshop employment . Recognition of this shift may be relevant for the government and the TUC for the next round of the Multi-Fibre Agreement. In fact, the trade union movement in the UK can ill afford to overlook the roots of the creation of such an underclass, as the rise of manufacturing homework poses serious problems to the organised labour movement . Between 1963 and 1983, membership of the National Union of Tailors and Garment Workers fell dramatically . Whereas the membership in the East End of London alone was 22,000 in 1963, the membership in the whole of South-East London twenty years later hardly exceeded 5,000 (interview with Chris Wilson, NUTGW, September 1983) .

Clothing industry Big clothing firms such as Simpson's, Burberry, Moss Brothers, Poliakoff and Hope Brothers have moved out ; in their place have moved in ethnic entrepreneurs with their army of female workers, providing cheap machinists . This sweated labour of ethnic minority women provides an increasing input into goods sold by high street retailers . This is bound to be so, as more than 90% of the 50,000-odd retail outlets for clothing (excluding stalls, hypermarkets and supermarkets) are controlled by only a dozen or so well-known chains . Underneath all the razzamatazz of fashion and designs, the majority of the clothes in the UK, according to the consumer survey taken by Euromonitor, is shoddily made and badly sewn together . The move towards better quality clothes, that perhaps need greater supervision on the factory floor, is not pronounced in the UK . The picture that emerges, therefore, to borrow the phrases from Euromonitor, is that `the pursuit of efficiency and low prices by some of Britain's best-loved high street names has a backdrop of long hours being worked for poor pay in conditions which . . . contain significant hazards' (Euromonitor, 1985 : 49) . Recognising homeworking as a prominent feature of the changing structure of employment is the precondition for any programme for remedying the problems of low pay and exploitation in the manufacturing industries . Although more knowledge would be useful, it would still be difficult to suggest a straightforward solution for improving the conditions of immigrant female homeworkers . Their position in the economy is defined by the lack of opportunities for them and their men in the host economy . Improving their lot, therefore, would really demand a radical and ambitious restructuring of the economy and the society . The debates over the abolition of wages councils (Low Pay Unit, 1984(a) ; Keevash, 1985 ; The Guardian, 30 July 1984) or over the effectiveness of the introduction of a minimum wages policy (Low Pay Unit, 1984(b) ; Forrest & Dennison, 1984 ; Trade Union Congress, 1984(a) ), are pertinent in that - one hopes they make the authorities and the mainstream of the labour movement aware of the growing phenomenon of homeworking and the low pay associated with it (The Guardian, 11 September 1984 ; Trade Union Congress, 1984(b) ) . Legislation on its own can do very little to alleviate a situation that is circumscribed by wider economic, social and racial problems . Hence some fundamental changes in the state benefits and income-tax systems, that would assure a minimum living wage to low-income families and help them to get out of the poverty trap (Kay et al, 1984), will be necessary to help make these workers visible in the official statistics . Indeed, as we have

75

Conclusion

Capital & Class 76

shown, it is the fear of breaking the law that often prevents the homeworkers from coming out in the open . Grassroots researchers and workers in the last few years, therefore, have been active in producing leaflets and booklets that explain, in simple terms and ethnic languages, the bewildering maze of fiscal benefits and tax liabilities that often confuse even a white middle-class male worker . Having been made conscious of the boundaries of their legal rights, homeworkers are getting in touch with the campaigning groups . It has been a modest start, but given resources, the pressure groups will be able to go a long way towards eradicating the invisibility of this growing workforce . This would be no mean contribution to economic analyses that rely so strongly on quantification . Finally, the rise of homeworking is not simply a national issue, as a mode of organising the labour process, it is currently playing an important role in the global restructuring of capital . The dynamics of the process may open up a new area of research for assessing the desirability and effectiveness of such a system, with its new-found flexibility (Bollard, 1983 ; Boissevain, 1984 ; Solinas, 1982 ; Brusco, 1982) . But for black and migrant women, from their own precarious position in the sweatshops and homebased work, small may not appear so beautiful .

Acknowledgements I would like to express my gratitude to the Industry and Employment Branch of the Greater London Council for funding me to write an earlier version of the paper as an input into The London Industrial Strategy, 1985 . My sincere thanks to the referees of Capital and Class for their timely suggestions for improving the argument of the paper; to Julia Burdett, Robin Murray, Annie Ralph, Ruth Pearson and Ursula Huws for sharing my passionate concern with the issue ; and to Peter Dronke for editing several versions of the paper with loving patience .

Clothing industry Aldrich, H ., Jones, T . P . & McEvoy, D . (1984) `Ethnic advantage and minority business development' in Ethnic Communities in Business, ed . Ward, R ., & Jenkins, R ., Cambridge University Press . Aldrich, M .J . (1984) `Home : The command base', paper by the chief executive of Rediffusion Computers Limited, presented at the Planning for Home and Work conference organised by Housing Association Charitable Trust, London, 2 May . Allen, Sheila (1983) `Production and Reproduction : the lives of women homeworkers', The Sociological Review, November. Anthias, Floya (1984) `Sexual divisions and ethnic adaptation : the case of Greek-Cypriot women' in One Way Ticket : Migration and Female Labour, e d . by Phizacklea, Annie . Routledge and Kegan Paul . Birnbaum, B ., Eversely, J ., Clouting, T ., Allard, D ., Hall, J ., Woods, K ., Allen, R ., Tully, D . (1981) The Clothing Industry in Tower Hamlets: an Investigation into its Structure and Problems, sponsored by Tower Hamlets Council (mimeo) . Birnbaum, B . (1975) `Women's skill and automation . A study of women's employment in clothing industry' (mimeo) . Bisset, Liz & Huws, Ursula (1984) Sweated Labour : Homeworking in Britain Today, Low Pay Unit . Boissevain, J . (1984) `Small entrepreneurs in contemporary Europe', in Ethnic Communities in Business, ed . Ward, R . & Jenkins, R. Cambridge University Press . Boissevain, J . (1984) `Small Entrepreneurs in Contemporary Europe', in Ethnic Communities in Business, ed . Ward, R. & Jenkins, R . Cambridge University Press . Bollard, Alan (1983) `Technology, economic change and small firms', Lloyds Bank Review, January . Brown, Malcolm (1983) `Spicing up the business world', The Sunday Times, 2 October . Brusco, S . (1982) `The Emilian model : productive decentralisation and social integration', Cambridge Journal of Economics, No . 2 . Buxton, J . (1983) `The man who fashioned a clothing empire', Financial Times, 24 October . Campbell, B . (1979) `Lining their pockets', Time Out, 13-19 July . Clairmont, F . & Cavanagh, J . (1981) World in their Web, Zed Press, London . Coyle, Angela (1982) Work, Women and the Labour Market, ed . West, Jackie . Routledge and Kegan Paul . Donnison, David (1984) `The Home-centred British', paper presented at the Planning for Home and Work conference, organised by Housing Association Charitable Trust, London, 2 May . Duffy, Patrick (1979) Bengali Action-Research Project Tower Hamlets (unpublished) : a background report for Commission for Racial Equality, and report on The Employment and Training Needs of the Bengali Community in Tower Hamlets, Commission for Racial Equality, London . Euromonitor Publication (1985) The UK Clothing Report, London . Forrest, D . & Dennison, S . (1984) Low Pay or No Pay, Institute of Economic Affairs, London . Greater London Council (1984a) Report of the National Homeworking Conference, June . Greater London Council (1984b) A strategy for homeworking in London : a

References

77

Capital & Class

78

report by the Director of Industry and Employment and Chief Economic Adviser . Greater London Council (1984c) Homeworkers' Charter, prepared by the London-wide Homeworking Group and the National Steering Group . Greater London Council (1984d) The London Clothing Industry, Economic Policy Group : strategy document No . 7 . Greater London Council (1985a) The London Industrial Strategy, chapter on homeworking . Greater London Council (1985b) Report of the National Homeworking Conference of 1984 (forthcoming) . Greenwich Homeworkers' Project (1984) Annual Report, London . The Guardian (1984) `Coordinated St Michael', Wednesday 24 October. The Guardian (1984) 'Gummer unveils offensive on sweatshops', 11 September . The Guardian (1984) `Union considers exposing TUC rift by pressing for low pay', Monday 30 July . Guy, Ken (1984) `Footwear', in Basic Consumer Goods, ed . Guy, K., SPRU, Sussex . Hakim, Catherine & Dennis, R . (1982) `Homeworking in Wages Council Industries : a study based on Wages Inspectorate records of pay and earnings', Research paper No . 37, London, Department of Employment . Hakim, Catherine (1982) `Homeworking in the London Clothing Industry', Employment Gazette, September. Hakim, Catherine (1984a) `Homework and Outwork: national estimates from two survey's, Employment Gazette, January . Hakim, Catherine (1984b) `Employers' use of homework, outwork and freelances', Employment Gazette, April . Hoel, Barbara (1982) `Contemporary clothing sweatshops', in Work, Women and the Labour Market, ed . West, Jackie . Hoffman, Kurt & Rush, Howard (1985) Microelectronics and clothing, Science Policy Research Unit, Sussex. House of Commons (1981) Select Committee on Employment, Homeworking, CBt, Wages Council, (Employers') Consultative Committee Memorandum, London HMSO, 7 April . Huws, Ursula (1984a) `New Technology Homeworkers', Employment Gazette, January . Huws, Ursula (1984b) The New Homeworkers : New technology and the changing location of white collar workers, Low Pay Unit . Insolvency Law and Practice (1982) Report of the Review Committee, HMSO London . International Herald Tribune (1980) 1 September . Kay, J ., Morris, N . & Dilnot, A . (1984) The Reform of Social Security, Oxford University Press . Keevash, S . (1985) `Wages Councils : an examination of trade union and Government misconceptions about statutory wage-fixing', Oxford, December (forthcoming) . Ladbury, S . (1984) `Choice, chance or no alternative, Turkish cypriots in business in London', in Ethnic Communities in Business, ed . Ward, R . & Jenkins, R ., Cambridge University Press . Leighton, Patricia (1983) `Employment and self-employment : some problems of law and practice', Employment Gazette, May .

Clothing industry

Lie, Merte (1983a) 'Fjernarbeid i Norge', i Distansearbejde in Frankrig, Sverige or Norge en seminarraport . Publikasjoner fra Institute for geografi, Samfundsanalyse og datalogi. Arbejdspapir No . 34, Roskilde Universitetscenter . Lie, Merte et al (1983b) `The significance of technology for the working life of women', paper submitted to Scandinavian Congress of Sociology, Stavenger, Norway (mimeo ; available from the authors from IFIM, Trondheim) . Low Pay Unit (1984a) Below the Minimum : Low Wages in the Clothing Trade, London . Low Pay Unit (1984b) From the Dole Queue to the Sweatshop, London . Manufacturing Clothier (1984) April, pp . 17-18 . Manufacturing Clothier (1981) April . Marsh, P . (1984) `Fashioned by computers', Financial Times, 14 February . Martin, Jean & Roberts, Ceridwen (1984) Women and Employment: A Lifetime, HMSO . Massey, Doreen & Meegan, Richard (1982) The Anatomy of 7ob Loss, Methuen, London . Mattera, Philip (1980) `Small is not beautiful : decentralised production and the underground economy in Italy', Radical America, Vol . 14 . Mattera, Philip (1985) Off the Books: Rise of the Underground Economy, Pluto Press . Mitter, S . & Heery, M . (1985) `Low pay : the racial dimension', Women and Low Pay, Low Pay Unit . Mitter, S . (1984) `Rise of a semi-proletariat : Bangladeshi female homeworkers in the London rag-trade', in Homeworking on a World Scale, Newsletter of International Labour Studies, The Hague, April . Mitter, S . & Van Luijken, A . (1983) `A woman's home is her factory', in Of Common Cloth : Women in the Global Textiles Industry, ed . Chapkis, W . & Enloe, C ., Amsterdam, Transnational Institute . Monod, Elsbeth (1983a) 'Le teletravail : une nouvelle maniere de travailler', Datafrance, 15 September . Monad, Elsbeth (1983b) 'Le teletravail : on l'arbre qui cache la foret', Les Temps Modernes, October . Moreton, A . (1984a) 'Tootal cuts its cloth to suit changing markets', Financial Times, 11 June . Moreton, A. (1984b) `The pick-up that is not a hiccup', Financial Times, 23 March . Moreton, A. (1984c) `A textile concern's turnaround', Financial Times, 8 February . Murray, F . (1983) `The decentralisation of production - the decline of the mass-collective worker', Capital and Class, Spring volume . Murray, Robin (1983) Small Firms and the London Industrial Strategy, Greater London Council, Economic Policy Group . NEDO (1982) Changing needs and relationships in the UK apparel fabric market. NEDO (1983) Next : Cutting a new pattern - Import-substitution challenge', video . The News of the World (1983) `Slave trade workers risk lives', 18 December . The Observer (1984) `Slave labour in the rag trade', Sunday 13 May .

79

Capital & Class 80

Outworkers' Own - Newsletter published quarterly by Leicester Outwork Campaign Group, 132 Regent Road, Leicester . Phillips, A . & Taylor, B . (1980) `Sex and skill, notes towards a feminist economics', Feminist Review, No . 6 . Portus, Martin (1983) `Dubious is dubious in any language', The Guardian, Tuesday 6 September . Rainie, A .F . (1984) `Combined and uneven development in the clothing industry : the effects of competition on accumulation', Capital and Class, Volume 1 . Rubery, J . & Wilkinson, F . (1981) `Outwork and segmented labour market' in The Dynamics of Labour Market Segmentation, ed . Wilkinson, F ., London, Academic Press . Rush, H & Soete, L . (1984) `Clothing', in Technological Trends and Employment: Basic Consumer Goods, ed . Guy, K ., Gower . Shah, Samir (1975) Immigrants and Employment in the Clothing Industry, The Runnymede Trust, London . Shuster, Barney (1983) `Tribunal slams illegal practices in clothing', press statement, 23 March, NUTGW, London . Sivandandan, A . (1982) A Different Hunger, Pluto Press, chapter 3 . Solinas, Giovanni (1982) `Labour market segmentation and workers' careers : the case of the Italian knitwear industry', Cambridge Journal of Economics, No . 4 . The Sunday Times (1983) `Spicing up the business world', 2 October . The Times (1983) ` "Death blaze factory was not inspected", fire prevention officers say', Friday 28 October . Toffler, A . (1980) The Third Wave, Collins, London . Trades Union Congress (1984a) `Low Pay : paper for a dicussion', 26 July . Trades Union Congress (1984b) 'Homeworking', 15 April . Wallington, P. (1984) Butterworth's Employment Law Handbook, third edition, Butterworth . Ward, R . & Jenkins, R . Ethnic Communities in Business, Cambridge University Press . Ward, R ., Randall, R., & Kromar, K . (1984) `Small firms in the clothing industry' . Paper presented at the National Small Firms Research Conference, Trent Polytechnic, September . Werbner, Pnina (1984) `Business on trust : Pakistani entrepreneurship in the Manchester garment trade', in Ethnic Communities in Business, Cambridge University Press, ed . Ward, R . & Jenkins, R ., Cambridge University Press . Withers, J . & Fawcett, A . (1984) `Family that fashioned universal flair', The Times, 24 August . Williams, S . (1981) Politics is forPeople, Penguin . Yeo, S . & Wee, A . (1984) `Research into the buying patterns of big stores in the textile trade: What opportunities for small business?', MBA Project Report, Aston University .

Gareth Locksley

Information technology and capitalist development Introduction • INFORMATION TECHNOLOGY (IT) can be viewed as a collection of machines - computers, telephone exchanges, word processors, work stations of various description, robots, satellites, automatic cash dispensers, cable Tv etc . Software is used to activate and operate these machines without human intervention or manage a user through the steps of an activity . Broadly there are two sets of machines that make up IT - computers and telecommunications . They share features of a common technology associated with digital electronics . The distinction between computers and telecommunications equipment has blurred so that their progress is described as convergent, a theme that recurs here . But there is much more to IT than machines . There is no activity that IT does not touch - in home, office, factory, culturally, politically, economically . Reinecke has termed IT `the Micro Invaders" and asked the simple question `what's in it for me?' For IT has been boosted into Western societies as the vehicle for greater political participation, more leisure, greater equality

c&c

27--F

As the potential for a vast number of new services and products in the wake of IT developments becomes apparent, private capital is moving in to secure its exclusive exploitation for private profits . The article traces the development of existing Information Technologies through the organisational imperatives of the military and multinational corporations . It shows how nearly everywhere capitalist pressure is leading to privatisation of public ownership and control over information systems and how national and international capital is restructuring to exploit IT . In the context of capitalist competition and production for profit the exploitation of IT will worsen class, gender and international inequalities (although in this article the latter two are only briefly touched on) . But 81 Gareth Locksley argues that IT still carries the seeds of a more equal society; the left has to rethink and appropriate IT and fight for its development under social control.

Capital & Class 82

between sexes and classes, more freedom, more choice . IT's potential for these developments is real but IT as implied can produce the opposite outcomes of more inequality, less freedom, less choice, greater centralisation of power and more intense and controlled work . IT is a capitalist machine in capitalism . The IT environment (machine, software, institutions) reflects the structure of that society, underpinned by the dominance of men, the dominance of North over South, and, most fundamentally, by the logic of production for profit . Though IT is a new means of production, the combination of several new technologies, it is not revolutionary in the context of capitalism, merely a development of machines . It also opens up new areas for capitalist production through new products and services . Through cable TV and personal computer link-ups IT is extending capitalism into the home by the further commercialisation of culture . IT is a stage in the progression of capitalist development specific to prevailing conditions . The current crisis of capitalism remains that of realising profits, of labour resistance, of bursts of intense competition between capitals . There is also an organisational crisis centred on the need to control globally dispersed units of economic activity and to reaffirm control over the work process . Corporations that successfully apply IT gain a competitive advantage that through the logic of the market forces other to follow . So there are two IT-related messages : for the public `IT is good for you, it will transform your life' ; for capital `automate or die' . The market issues the second message and the logic of capital the f irst . I T nevertheless needs to be legitimised if it is to be introduced smoothly, so it is boosted by myth creation . IT involves the movement of electronic signals from place to place, frequently across borders . Consequently, the doctrine of the supremacy of the free flow of goods, services, and information is central to IT in use . It is the same doctrine that underlies the rise of de-regulation, supply side economics, privatisation, the renewed action on the European Community's `internal market', the end of exchange controls . When the steam engine was introduced and spread, it brought about new means of production and communication . It allowed an extension of the capitalist system into new regions of the world and areas of economic activity . I T is a new ingredient in the giant recipe of capitalism -one that will transform very many of the individual courses, bring forth new ones, or delete old ones . But the essential flavour of the meal is the same . Only a few of the `courses' are discussed here . Section 2 traces the convergence of the military and the multinational corporation with respect to their organisational requirements . It was the imperatives of these

Information Technology

organisations that led to the search for a technological fix provided by IT . Without IT international capital, especially financial, could not have developed along its current course . Their actions have determined the global IT environment . Section 3 demonstrates the levels of surplus that can be derived from manufacturing IT equipment or operating IT-related services . These surpluses are achieved by the commercialisation of information . Surplus is also extracted when IT is used in economic activity because it gives greater control over the labour process . The outcome of the uneven way in which IT is introduced is a changing spatial and structural pattern of economic power . One area that has experienced large injections of IT has been telephone networks . As a consequence their potential for surplus has been raised enormously . With few exceptions telephone networks are owned socially . Private interests were denied access to potential surplus from service provision . Section 4 explains policies for de-regulation and privatisation in terms of the role they play in facilitating private capital's involvement in this growing area of surplus . Section 5 analyses how information is both a commodity and a resource . Information has existed outside generalised commodity production but IT has pulled it into this mode of production . Information has been held in common ownership but the purveyors of IT services need private rights of ownership if a surplus is to be realised . Furthermore, information is gaining the political status associated with capital and as such is becoming politically decisive . In this role IT has played a major part in the restructuring of the global political economy . Section 6 examines the re-structuring of the global economy that is underway around IT . This involves the processes of centralisation and concentration or, in the terminology of IT, convergence . Here, not only are hardware makers joining forces, they are also linking with service suppliers . Another form of convergence is the conglomeration of global media corporations like News International which have acquired a full range presence in electronic messages, production and distribution together with newspaper and publishing . Their view of the world, the ideological content of their electronic messages has important repercussions for poor countries, reinforcing their cultural and consumption dependence on the North . The effect of IT on LDCs is examined in Section 7 . These countries are not homogeneous and the impact of IT varies across circumstances . Broadly, two groups - the NICS and the poor countries - are discussed . For the former the outcome of their industrial development strategies are considered whilst for the latter the emphasis is on `electronic colonialism' .

83

Capital & Class 84

Finally, Section 8 draws some conclusions and offers a tentative alternative strategy for IT that could propel capitalist development along a different path . The military and the multinational corporation

The military imperative The perceived needs of the military have been a major force in the development of IT . Computers were developed to solve problems related to encryption, decoding and missile trajectory . Microelectronic technologies owe their genesis to the space race : US rockets were smaller than Soviet rockets, they could not carry sufficient computer hardware onboard because they were unable to match the pay-load of Soviet Russia's . Miniaturisation provided the solution and gave us the `chip' . Operationally, military commanders are faced with multiple information sources which must be processed rapidly and whose complexity computers could manage . Whole defence systems like the North American Air Defense Command (NORAD) are now run on computers which receive, process, monitor and initiate actions on large volumes of data flows . The military has also taken a keen interest in telecommunications because of its requirement to control dispersed units and receive information from them and to gather `intelligence' . Telecommunications technologies have been developed to intercept and eavesdrop on `enemy' communications . The major interest in space follows from the need for surveillance . Britain's GCHQ is part of the vast Signals Intelligence (5IGNIT) network that forms a global web from Australia's Pine Gap to Fort George G . Meade near Washington . The us National Security Agency (NSA), described as `the largest single espionage factory the free world (has) ever known or could ever imagine' 2 has a room containing eleven acres of computers and boasts the most sophisticated telecommunications system in the world . Because the military's computers need to communicate, say between battle tank commander, Field Commander and upwards, there has been a drive for convergence between computers and telecommunications . As long as computers are separate from communications their range of applications is limited . Convergence is an imperative of the military . With the budget to back its needs the distinction between computers and telecommunications rapidly disappeared . IT and the internationalisation of capital

In one important respect multinational corporations and the military share a common objective : the control of dispersed

Information Technology

units . There has been an accelerating trend to the internationalisation of production, distribution and exchange . Raw materials and commodities have long been traded on international markets and a major feature of the post-war era has been the internationalisation of industrial and financial capital . For instance, in the UK only 18% of exports in 1981 were not accounted for by MNCs . 3 The decision of these MNCs determines an international flow of sub-assemblies, components and final products and causes associated activities in the service and financial sectors . Direct foreign investment by MNCs has produced a response from financial capital which has followed the path of internationalisation in the same way as industrial capital . But financial capital has also developed on its own . The institutions which manage UK pension funds for example (some £100 billion in 1984) have spread their purchases worldwide, buying property and shares in companies in Europe, Australia, Japan and the us . Half of their stock purchases went overseas in 1983 . In 1984 there were 470 foreign banks operating in London compared to just over 80 in the late 1950s . In 1973 banks operating from the UK (domestic and foreign) lent £39 billion to non-residents . By 1984 this overseas lending reached £465 billion . (PSBR is about £10 billion .) It has been estimated that the total financial assets of the `City' (their loans and investments whether British or foreign, owned or controlled by institutions which are British or foreign) were £1,000 billion in 1984 . 4 London is not the only financial centre . New York and Tokyo are also major loci of financial capital . In January 1985 the daily turnover on New York's foreign exchange market was ten times the daily total of imports and exports for the USA . 5 These figures suggest the sheer volume of flows of information related to finance capital far exceeds those related to industrial capital . They also indicate the imperative for information handling in a dispersed and highly uncertain financial environment . Without telecommunications and computer technologies these activities could not take place at the same rate . They now facilitate the 24-hour global stock and financial markets . The process of globalisation raised severe difficulties for those organisations involved if they were to control and coordinate every unit of their organisation whilst keeping the environment under surveillance . To perform the functions of production, distribution and exchange, information has to be collected, stored, retrieved, manipulated, up-dated and communicated . It is clear that these organisations have searched for a technological solution to their problem and found it - like the military - in IT . Competition and the profit imperative of globalised capital explain the demand for and development of IT .

85

Capital & Class 86

When applied they raise the potential for profit merely through enhancing control and keeping managers `in the picture', even before labour displacement is taken into account . If not applied the value of capital is threatened . Generally speaking then, IT is used to centralise, whether this is in the war room or board room . Just as the us Secretary of Defence can gain an instant up-date on world events or even listen to the conversations of Krushchev on his radio telephone in his Zim 6 so all the threads of the IT web lead to corporate HQ . For instance at the end of every shift in IBM's internationally dispersed research operations the day's output is transmitted back to the us where it is collated ; the sender units only receive `need to know' information . In combination, the military and MNCs have given us the IT information they want . IT and profit

The International Telecommunications Union has estimated that telecommunications administrations (like British Telecom (BT) ) have annual revenues totalling $250 billion and investment programmes worth $100 billion a year . In 1982/83 British Telecom recorded profits of f l,571 million (before interest and tax) and in the same year its revenues were £6,414 million . In 1982, before selling off all its local networks, AT&T earned profits of £4,124 million on income of £35,466 million and spent £10,836 million on capital equipment . In 1983 IBM's turnover was $40,180 million placing it fifth in Fortune's us `Top 500 listings' and its net income was $5,485 million, making it the most profitable industrial corporation in the us . IBM and (the new) AT&T are the most important corporations in the world of IT . Clearly they derive big profits from their involvement in the sector . Profit can come from making IT hardware or software . For example, ITT recently received a contract to supply the us army with tactical radios which could be worth $4 billion . In 1981/82 £1,208 million of the UK's defence spending went on electronics (IT), a sum only exceeded by expenditure on aerospace equipment - itself a big IT user . The European market for personal computers (for the professional sector) was over £1 billion in 1983 . In the same year revenues from computer-aided design equipment was over £500 million in Europe . A second source of profit is the sale of IT services usually involving some form of communication . The telecommunications administrations (the PTTS) have traditionally taken this sector of the market and their major customers are large organisations . For example, 33% of BT'S revenues are accounted for by its largest 300 customers . Now many companies have entered the market to supply IT-related services like automatic ticket reservation and issue, viewdata and customer data bases . These are known as VANS

Information Technology

87

(Value Added Network Services) . They are the major growth area and represent anything other than traditional voice communications by telephone . The European market for these services will be over £500 billion by 1990 . Firms like the Financial Times and Reuters have established markets for the sale of information and now these are run on IT . Others like Reader's Digest have moved into the market for the sale of information through its service called `The Source' . Even Seeboard (the UK's South East Electricity Board) and British Leyland operate VANS . The majority of new IT-related communication services are designed for business use whilst householders are offered mostly trivial services . But the essential feature of all of these activities is the commercialisation of information . It is very well documented that the introduction of IT raises the profit potential, whether in the office or the factory, because it provides greater control over the labour process, intensifies productivity and reduces labour costs from the perspective of an individual firm . 7 These are the points on which IT is marketed . `This machine does not take tea breaks, have babies or go sick' is the implicit slogan of the sales campaign . In the factory robotics, flexible manufacturing and computer-aided design and manufacture have been the instruments of change . Fiat stressed the use of robots in its car sales campaign . Equally IT has been heavily applied in the sphere of finance capital . Bank of America is currently spending $5 billion on IT because it sees new technology as a key factor in returning to high levels of profitability . The Vice-President in charge of the strategy observed : `the value of financial information is fast approaching that of money itself.' IT provides new opportunities for valorisation and new modes of exploitation in old activities . It is a response to pressure on profits . Without this technology capital would face a different form of crisis - one focussed around ignorance or lack of information and loss of control - one where development was severely arrested . Competition and the profit imperative explain how the technology `leaked' from these systems came to colonise other aspects of the economic system . The evolving structure of the global economy spatially and sectorally reflects those areas to which IT could or could not be applied profitably . The `sunshine/ sunset' phenomenon encapsulates the global restructuring . Workers in BT'S POEU (Post Office Engineering Union) tell an ironic story : `How many men do you need to run System X?'the answer is `One man and a dog' . `What does the dog do?' `Makes sure the man doesn't touch the machine!' System X is BT's digital exchange system which performs the complex switching function that links callers and destinations . All of the

De-socialisation (aka privatisation)

Capital & Class 88

world's major telecommunications administrations are introducing similar digital exchanges . Not only do they dramatically reduce labour, they also facilitate VANS . They are the core of IT representing computers applied to 'routeing' problems instead of `sales ledgers' . They raise the profit potential for the operator both by reducing running costs (labour, maintenance, floor space, etc .) and allowing the plethora of new commercial IT-related services . Nearly everywhere telecommunications are in the hands of an actual or virtual monopoly . With the exception of the us, until recently, these monopolies were state run . In Australia, Japan, the Federal Republic of Germany and Britain there has been a demand for the sale of these public networks to the private sector . This demand arose with the introduction of digital electronic technologies . In Australia 9 a change of government arrested well developed plans to accede to this demand . But in Japan and Britain the desocialisation of these public assets has gone ahead and in the Federal Republic the process is well underway . The change of ownership is justified, ideologically, as a means of creating a share-owning democracy and of further advancing efficiency . These arguments mask the real reason and are quite fallacious . If one million people each bought 200 shares in BT they would collectively own les sthan 4% of BT where previously it was publicly owned . A private monopoly is no more `efficient' than a public monopoly . It can only become more technically efficient if it abandons social commitments - i .e . becomes socially inefficient by denying access . The real reason for the desocialisation of the telecommunications networks is to allow private (finance) capital to exploit the revenues and profits of these huge organisations . But the privatisation programmes were promoted within a populist framework, the myth of participation and ownership and the false ideology of freedom of choice . Accompanying the de-socialisation programmes has been an opening of IT markets to new entrants . If the monopolies of the public or private networks had been maintained VANS development would have been slower because physically they could not have kept pace with the changing environment . Competition and the profit imperative have circumvented this potential obstacle by breaking the monopoly . Because of de-regulation profit can now be realised in new markets which are developing in an uncoordinated manner such that only powerful sectional interests are being served (like BT's big 300 customers) with little inter-connection between services . No attention is paid to the needs of those outside the business community and especially of those without phones . Information technology harnessed to competition and the

Information Technology

89

profit imperative has brought about political changes whereby the state has relinquished control and co-ordination of the IT environment while enhancing the market orientation of the technology . Additionally, there have been distributional aspects of the de-socialisation and `liberalisation' programmes . Very frequently information is held in common ownership . Often organisations are obliged to publish information . Successive Companies Acts and legislation have determined that various legal entities are required to provide information at no charge . Parliaments provide records of their proceedings, government departments and agencies similarly issue information to the public . In many ways information has existed outside general commodity production, accumulated in public libraries . Information is a resource input to all economic activity . Sometimes it is the direct product of economic activity, at other times the by-product . Information has a clear use value in business which yields future income streams . Consequently organisations invest in the resource of information in the expectation of related rewards . In a similar manner information is decisive in determining the life chances and opportunities of individuals and households . Of course a system of common ownership does not guarantee equality of access but the development of `library' systems can be seen as an egalitarian move . Certainly the system of common ownership that has developed is far less exclusive than the system of access dominated by the ecclesiastical power structure of an earlier period . Clearly common ownership of information is a pre-requisite for egalitarian societies . This common ownership feature of information is also strongly associated with the concept of the welfare state and benefits systems . A benefits programme cannot exist without public information about targets, eligibility, point of contact, etc ., and a central feature of the welfare system is the dissemination of information through public education . The information economy is based on information as a commodity . This refers not just to the high profile information providers like Reuters but to a wide range of activities . These include Pay TV, Cable TV and Direct Broadcast by Satellite (DBS) where information and entertainment are treated as commodities for the household. The same applies to many of the new interactive services available through the phone/home computer/TV link-up . These are the new technologies enabling a greater commercialisation of culture where culture is not only a commodity but reinforces the conditions of general commodity production . Information technology has made concrete the concept of the global village and the global shopping centre . It provides for the

Information as commodity and resource

Capital & Class 90

marketing, design, production and replacement of the `world' car, soft drink, computer, and establishes the necessary conditions for private consumption . Our routine activities create information . When this is captured and amassed it can be transformed into a commodity . Personalised `junk mail' is one example of this form of commodity information . Details about the interests, income, composition, debts, purchases, travel, reading, etc ., of households and groups are regularly collected and traded as commodities . What was once `ours' is now in the hands of someone else . The essence of a commodity is private ownership for it is through this relationship that it achieves exchange value . The information economy will increasingly transform the common ownership of information into one of exclusivity through private ownership so that information as a commodity can generate private income . Information can convert something that is useless into a resource ." IT through satellites can gather information that performs this transformation . Satellites observe large areas at once including those areas that are inaccessible by any other means . Remote sensing technology can distinguish between crops, indicate the health of crops, identify the likely presence of minerals and water, measure the depths of coastal water, track the movement of fish, warn of flooding, predict the weather and provide maps and charts . Clearly this form of IT can transform the wealth-creating process especially for poor, less developed countries . In the us, such earth resources satellites, called Landsat, developed and owned by the Federal government, gather very large quantities of information that can convert what appears useless into a resource . Landsat is in the process of being sold to private commercial interests so that the exchange value of its information can be realised ." (Apparently there are plans to sell off us weather satellites .) In history certain key resources have held such a position that whichever group controlled the resource dominated all other groups . Land and capital have fallen into this category . Increasingly because of technological developments information meets the criterion for special status resource because it is a key resource within the economic activity of large corporations and because of the alchemy it performs on apparently useless material . At the same time information is a commodity requiring a system of private ownership that expropriates . An extreme example of dispossession is found in `artificial' intelligence and robots where the skills of labour are captured within IT products . The enhanced dual nature of information facilitated by information technology derives from the specific needs and actions of the military and the giant corporations . Multinational

Information Technology 91

corporations and the military machine require up-to-the-minute information management . For them it is necessary to establish and maintain control over their operations (work) and conflict in order to sustain their positions . When the Bank of America executive observed that the value of information was approaching the value of money he was recognising that information was joining the elite of resources . 12 For many corporations and agencies, information is more scarce than capital and in this new status, information is also assuming the political status associated with capital . At the same time information as a commodity is growing rapidly in importance as something that is traded and as a factor that re-inforces capitalism . Information technology is the instrument that allows the resource and commodity of information to be developed and gain ascendancy . The current phase of capitalist development is one characterised by the elevation of information and its associated technology into the first division of key resources and commodities . 13 Information is a new form of capital . As such the controllers of information, usually the controllers of capital, will dominate the political economy . But as a commodity it requires both property relations and expanding market mechanisms . Some of the many issues following from these developments in capitalism are discussed below . IT has been both the outcome and the stimulus to a re-structuring

of economic, political and social relations . Nora and Minc (1978) identified IT as a key issue in the crisis of French society with the computerisation of society being central to the conflicts between traditional and new values, elitism and democracy as well as being pertinent to their concerns for economic stability, social consensus and national independence . Nora and Minc accepted information and IT as a new form of capital, control over which provided the opportunity for new forms of political power and domination . I T can be seen as creating the conditions for a new class division of information-rich and information-poor, between individuals, communities, regions, states and economic blocs . Such is the flexibility of IT that a re-structuring could either reinforce the existing relations or radically alter them . The outcome depends to a large extent on the unfolding of the economic base and the opposed political forces . The de-regularisation of competition Two major forces at work in changing the structure of the world IT industry should be emphasised . These are de-regulation in the us and the competition between AT&T and IBM. The us Federal Communications Commission (FCC), under

The emerging structure of the industry

Capital & Class 92

pressure from the political environment of Reaganomics, has progressively relaxed the strict rules that constrained particular firms within specific markets and geographical locations . The result has been an explosion of new services and firms which have extended beyond the boundaries of the us . But the most important actions have concerned IBM and AT&T. The FCC's `Computer II' decision caused the break-up of AT&T in 1983 into seven regional telephone companies each about the size of British Telecom plus a new AT&T composed of Bell Laboratories (world leader in research), Western Electric (the major us telecommunications manufacturer) and its Long Lines division (long distance phone). Previously, the old AT&T, measured by assets, was the biggest company in the world . The new AT&T is the second biggest behind Exxon the oil giant . In return AT&T has been allowed to enter markets from which it was previously banned . These include hardware sales, data communication, electronic information processing and office automation (some of these are the areas where IBM has its strengths) . Further, AT&T was allowed to enter foreign markets for hardware sales and new service provision . The regional companies hived off accounted for 40% of AT&T's revenues and about 75% of assets so the new corporation is `leaner' and less constrained . About the same time as the `Computer II' decision, the long anti-trust case against IBM in the us was dropped as having `no merit' . The European Commission followed shortly afterwards . IBM had also been restrained from entering the telecommunications market but `Computer II' removed the obstacle . These corporations are the world leaders in their respective fields of telecommunications and computers . However, these two areas have converged whilst IBM and AT&T were legally denied the ability to move into each other's markets . Now they have and the contest between them is shaping the economic base of IT manufacturing . IBM has manufacturing facilities in 16 countries whilst AT&T was concentrated in the us having sold its overseas plants to ITT in the mid 1920s . The internationalisation of AT&T was one of the first consequences of their economic struggle . But with IBM and AT&T developing in new ways the rest of the global IT vendors were forced to restructure . AT&T's first move was to form a joint venture with Europe's leading electronics company - Philips - to gain access to the Dutch company's marketing expertise in Europe . AT&T followed this by purchasing 25% of one of the leading European computer manufacturers - Olivetti - in December 1983 . It has an option to increase its stake to 40% .

Information Technology 93

International centralisation and convergence Centralisation of capital has been the major factor in the global re-structuring of the IT industry inspired by us deregulation and the IBM V . AT&T contest . There are several economic arguments for centralisation through collaboration . The estimated development costs of a digital exchange is about $1 billion and about $14 billion in sales revenue are required to recover such costs . Collaboration reduces the entry costs for individual corporations . Further, to achieve sufficient sales a corporation must gain sales outside its domestic market - a particularly important objective for generally smaller European corporations . Consequently, corporations are attracted to internationalisation by joint ventures and take-overs with European firms moving to the US rather than expanding within Europe, together with technology links with Japan . Most corporations have specialist knowledge of one sector of the IT market computers, office automation, telecommunications . Since IT represents the convergence of these spheres, collaboration and centralisation are physical responses to the development path of technology and the demands of end users . AT &T has bought into computers, IBM has bought into telecommunications . Tables 1 and 2 indicate the size of the major players . At the time of writing Sperry and Burroughs were proposing to merge .

Table I World's 10 leading computer manufacturers . 1984

(us) Digital Equipment (us) Burroughs Corp . (us) Control Data Corp . (us) NCR Corp . (us) Fujitsu (Japan) Sperry Corp . (us) Hewlett Packard Co . (us) NEC Corp . (Japan) Siemens AG (W . Germany) IBM

Source: Datamation

1984 Total Revenue $bn 45 .9 6.2 4.9 5 .0 4.0 6 .5 5 .4 6 .3 7 .6 16 .0

Computer Revenue $bn 44 .3 6 .2 4 .5 3 .7 3 .7 3 .5 3 .4 3 .4 2 .8 2 .8

Capital & Class 94

Table 2

World's 10 leading telecommunications manufacturers Telecommunication equipment sales 1983 $bn AT&T

Technologies (us)

ITT (US)

Siemens (W . Germany) L . M . Ericsson (Sweden) Alcatel-Thomson (France) Northern Telecoms (Canada) NEC (Japan) GTE (US)

Motorola (us) IBM* (US)

11 .6 4 .86 4 .49 3 .16 2 .74 2 .66 2 .41 2 .38 2 .31 1 .73

*Excluding Rolm Source: Arthur D . Little

These companies spend massively on Research and Development in their process of competition . IBM is the biggest spender in the us, with an R&D budget of $3 .15 billion in 1984 . AT&T's was $2 .37 billion and ITT, Hewlett Packard, Digital Equipment and Xerox all spent in excess of $500 million in 1984 . Convergence not only characterises the evolution of technology, it is also the adopted mode of development for corporations in the sector . AT&T has strong links in Europe . It made a takeover bid for the UK's state-owned chip-maker Inmos to gain access to the British IT market . Olivetti has bought out Acorn maker of the BBC Micro personal c omputer . AT&T has formed a joint venture in Spain with CTNE- a telecommunications firm . Its collaboration with Philips allows access to the EEC market - a move that was strongly challenged by French capital as 'nonEuropean' . IBM has formed links with hardware and service providers . It has bought Rolm, a us firm with a strong presence in small private digital exchanges (PBX) which are very important to progress in office automation . Merrill Lynch is the largest us stockbroker, with IBM it is developing an electronic financial information and trading system . These are essential to finance capital and provide the means for electronic capital movement and the commercialisation of information . Sears and CBS are respectively amongst the leading retailers and media corporations in the us . In collaboration with IBM, they are developing home information services

Information Technology

representing an extension of the commercialisation of culture and information as commodity to the household . Satellite Business Systems (sBS) is one of the leaders in the new communications market to serve the needs of multinational capital with fast voice and data transmission . It is 60% owned by IBM ; the other participants are the leading insurance company, Aetna Life, and Comsat, the leading satellite operator. 14 The centralisation of capital under IBM places it across the entire IT market and simultaneously represents a huge concentration of capital . These developments have stimulated other corporations to follow the same route in order to compete . CIT Alcatel has been restructured by the French government to create a large corporation in telecommunications from a fragmented background of domestic and foreign capital . International collaboration has also been established through a link with Philips for radio telephones, Italy's Italtel for technology and Xerox for software . CIT Alcatel has acquired Roneo in the UK and Friden in the Us . Some form of link is expected with Siemens in West Germany . Philips has taken control of Grundig and Thomson of France has Telefunken, Saba and Nordmende . Restructuring in the UK

The UK has experienced a major re-structuring of its IT industry around the change of ownership of British Telecom (BT) . Standard Telephones and Cables (sTC), in which ITT holds 24% of the shares, has acquired ICI . - Britain's biggest computer firm which was previously state owned . STC has also bought International Aeradio . Cable and Wireless was sold off by the UK government in 1981 . It runs telecommunications franchises in Hong Kong, Macao, Bahrain and several other small countries . Recently Cable and Wireless bought out Hong Kong Telephone and has a number of joint ventures with the Chinese People's Republic . In the us the company runs long distance fibre optic networks and has a transatlantic link besides owning several smaller companies in service provision . In the UK Cable and Wireless has complete ownership of Mercury Communications, the only licensed national network competitor to BT . Plessey, one of BT's biggest equipment suppliers, has expanded into the us by acquiring an exchange manufacturer- Stromberg Carlson . It has also taken a sizeable holding in Scientific Atlanta which makes cable Tv equipment and satellite earth stations . But it is British Telecom that will have the most significant impact on the structure of the IT industry in the UK and even a broad . B T is believed to have £1 billion for acquisitions . It has offered to buy Mitel of Canada which manufactures smaller

95

Capital & Class 96

digital exchanges . If it is successful, BT will sell Mitel exchanges and cut back on purchases from its other suppliers like GEC and Plessey . But BT'S most important links are with IBM . It is increasingly using it as a supplier and had planned special communications services with it - JOVE - that would have put the combination in a strong position across Europe . The plan was blocked by the Secretary of State for Industry and the Office of Telecommunications but BT and IBM continue to collaborate . New entrants to the

IT

market

`Convergence' is not confined to existing corporations operating in the sector . The surplus potential of IT has attracted capital from other sectors including those in crisis . For example, General Motors has purchased Hughes Corp . with interests in the space segment, especially satellites, and it owns Electronic Data Systems (EDS), a VANS operator in the us . Recently EDS has established a data network to connect all the major Unilever sites throughout the UK . GM explains its move into IT as part of a natural progression to allow the incorporation of these products into its motor vehicles and their production techniques . Ford is another corporation with a significant presence in the world statellite market . But the major convergence or centralisation of capital is taking place in the production and distribution of `messages' . There is now little distinction between film and TV production or between publishing and electronic message distribution . Global media conglomerates are emerging like the empires of Robert Maxwell and Rupert Murdoch . These spread through newspapers, book and magazine publishing, TV programme production, TV station ownership, cable TV networks ownership, satellite TV distribution and electronic hardware production . In the Us, CBS Inc . derives only a third of its revenues from its TV network and ownership of TV stations . About a half of its revenues come from the production and sale of records and tapes,, d book and magazine publications (Praeger : Holt, Rinehart & Winston) . NBC is part of RCA - a conglomerate that manufactures satellites, rents cars (Hertz) and makes food . NCB accounts for a tenth of RCA's revenues . Twentieth Century Fox is half owned by Rupert Murdoch's New International (1984 turnover of $2 billion) which also owns TV stations in the us and Australia, operates the satellite Sky Channel in Europe and owns such newspapers as The Australian, The Times, The Sunday Times, News of the World and the New York Post . Even at the national level capital is moving into the IT-related sectors . For example, W .H . Smith is the second largest investor in cable TV programming . It is in-

Information Technology volved in Music Box, Screen Sport and an arts channel with Commercial Union (insurance) and Television South . W .H . Smith has a 30% stake in Yorkshire TV . Developments in Japan The Japanese manufacturers in the IT sector have convergence in an institutional form through the auspices of the Ministry of International Trade and Industry (MITI) . From 1949 MITI has held a pivotal position in the Japanese economy . Through the 'Kondanki' system government, banks and business decide on those sectors in which corporations will compete internationally and devise strategies to attain success . Banks provide long-term funds, imports are severely restricted and frequently us technology is adopted and reproduced at lower cost . Japanese manufacturers have tended to automate domestic manufacturing capacity to a greater extent than their us rivals which have usually gone for `cheap labour' alternatives in South East Asia . In the early 1970s MITI organised Japanese companies in the electronics sector along the Kondanki pattern . The major firms were `aligned' to particular market segments and arranged so that no firms competed with each other for foreign markets or in research and development . At the same time special efforts were put into the software and space sectors and experiments were carried out on `wired cities' . By these methods convergence of capital and technologies was achieved . 15 The evolution of a new major industrial sector follows the paths of centralisation, concentration and globalisation . There are winners and losers until a stable structure is formed . During this process economic power is fluid and industrial capital receives various degrees of support from governments . This can take many forms involving procurements benefits, R&D funds and state subsidies . A noticeable feature of the unfolding of the IT industry has been the ideological role played by the us government . It has been very active in promoting the free flow of information and services across frontiers . This of course benefits us service and information operators and the us generally which boasts the highest population of IT hardware in use . The us government has also applied strenuous pressure on Japan to both open up its markets to the us IT industry and to provide these same firms with technology whenever Japanese `state of the art' exceeded that in the US . 16 A further form of intervention has been its practice of extra-territorial control of exports by us subsidiaries either directly or indirectly to the Soviet bloc . Europeans claim that Cocom rules are applied in a very uneven manner to their detriment and us capital's benefit . C:&c 27-G

97

Capital & Class 98

The structure of the global IT industry is far from stable but it is clear that IBM and AT&T will maintain leading positions, akin to General Motor's and Ford's in a previous stage of capitalist development . Their decision will be crucial for the way in which IT is applied, where it is used, made and researched . IT and less developed countries

LDCS are clearly not a homogeneous group . Here a simple distinction is made between the poorest countries and the Newly Industrialised Countries (NICS) . There is no doubt that the poor countries will not be participating in the production side of IT . However, the technical flexibility of IT offers the prospect of greater decentralisation and a wider access and distribution of information . This resource could provide a significant push towards development in the poor countries . Earth resource satellites, agricultural data banks, educational and health services through IT could help to improve and sustain some development . However, the likely outcomes in practice are greater disparity and centralisation . The key to exploitation of IT is communications facilities . When these are widely available the prospects for information transfers to the poor countries will be enhanced . Table 3 below illustrates the distribution of telephone densities in the world .

Table 3

Telephones per 100 inhabitants World Industrialised countries Developing countries Africa Asia and Pacific Latin American and Caribbean Source :

19 .1 44 .5 2 .8 0 .8 2 .0 5 .5

Saunders et al (1983)

The disparities between regions strongly correlate with each region's ability to participate in the information society (as users of information) and the information economy (as workers) . But the telephone density figures mask deeper issues . Within developing countries the telephone facilities that exist are highly concentrated in a few main centres, where the telephone density is typically 10 times that in the rest of the country (compared to 1 .5 times in industrial countries) . There is usually no service to provincial towns and frequently 70% of a country's population has no access to a telephone, while the quality of international telecommunications links is very good . The available systems

Information Technology have been designed for the use of capital, financial and industrial, integrating the major centres of the poor and developing country to loci in the North and centralising the global decision-making process . Another facet of communications hidden behind the figures is the inefficiencies within these countries created by their lack of communications and the huge rate of return that investment in telecommunications would produce . The average economic rate of return on telecommunications investment is potentially about 30% 17 as calculated by the World Bank . Consequently, the telecommunications systems that prevail in poor countries, designed for the use of multinational capital, strengthens the centre : periphery relationship and retards the prospects for growth in those countries because it sustains inefficiencies and cripples domestic development . At the same time the form of these telecommunications structures precludes the type of information transfer that is technically feasible . `Electronic colonialism' There are some message transfers, largely one-way and mostly radio and TV programmes with associated advertising . McPhail has termed this transfer `electronic colonialism' .' 8 The concern is with the content of the message and the commercialisation of culture whereby the ideology of the North is beamed by satellite or other means to every village . A recent film on West Pacific Islanders who held sharks to be their ancestors forcibly demonstrated the impact of the digital gunboats . A single TV in a village pushing out regular commercials for a well-known soft drink and other products had transformed the local economy . Children began to demand processed food, mothers engaged in the cash economy to satisfy their children ; the men sold their sacred shark fins to raise cash and traditional structures collapsed . But there is an even more pernicious aspect to electronic colonialism . This concerns the effect on both the self-image of poor countries generated by Northern news and information providers like Associated Press, Reuters and Agence France Press and the received behavioural modes of journalism inherited from past colonial powers . The former stigmatises poor countries as earthquakes, disasters and human zoos . The journalistic style of Western media factories is centred on opposition, the extraordinary, drama which are technically only suited to multi-media interactive systems . `Yet these attitudes . . . are anathema to governments desperately seeking consensus by highlighting the importance of "doing something small but useful every day" . These governments (of poor countries) want the media to emphasise the stolid yet "heroic" consistency of a society "in the

99



Information Technology

making" .' 19 Poor countries have severely criticised the doctrine of the free flow of information made so much easier through developments in IT and are campaigning for a New World Information Order . As yet IT only stretches the gap between the North and the poor countries . If anything IT is further undermining their position rather than providing any advancement . The impact on NIC industrial strategy

Many of the Nics have participated in the developments in though they experience the same electronic colonialism as poor countries . Mostly they have provided multinational capital with low cost assembly lines for labour-intensive operations . Hong Kong, Malaysia, Singapore, Taiwan, South Korea and Indonesia host us, Japanese and European corporations from the electronics/IT sector . Usually young female workers are employed, in conditions far below those of their home counterparts, at low pay and with no possibility of trade union representation . 20 The foreign earnings of these countries have become closely linked with the decisions of the multinationals operating in the sector . 21 For instance, in 1981 semiconductor microcomponents exports earned the Philippines around $636 million, 11% of all exports . Semiconductors have surpassed the performance of sugar, coconut oil and copper, traditionally the country's top foreign exchange earners . However, the position of some NICS is weakened by technological developments in IT that affect not only IT sub-assemblies and hardware but their entire industrialisation programmes . As micro-electronic technology has progressed, fewer and fewer components are required on any printed circuit board . These are the labour-intensive off-shore assembly tasks performed in NICS . At the same time greater emphasis is given to quality control and testing (and control over the labour process) . Automation of testing and component mounting is undermining the attractions of off-shore assembly for IT corporations so a gradual process of withdrawal to the `mainland' is underway . Moreover, the advent of cheap forms of automation simultaneously eats into the 'comparative advantage' of developing countries in all the labourintensive assembly-type operations that they host . 22 For example i n garments manufacture automatic micro-processor controlled cutting machinery, which can minimise wastage and change patterns on command, can be integrated into automated sewing machines similarly designed and controlled . These developments weaken the attraction of cheap labour especially when capital allowances and subsidies are available at `home' . The advent of IT can therefore undermine development IT

•

•• •

101

Capital & Class 102

programmes in NICS where their attraction to MNCS are superseded by new IT production technologies . In some of the NICS, however, indigenous capital has made some headway, competing in both their (often protected) domestic markets, as well as the international market . This has been especially so in South Korea, which has relied little on foreign MNCS, even in IT-related sectors of the industry . In others like Singapore, which remains highly dependent on MNCS, some advance is being made in attracting foreign capital by upgrading to more capital-intensive production, emphasising skill and scientific content . Taken as a whole, the success of the NICS depends upon access to venture capital and technology and their ability to compete in less labourintensive, higher-skill product markets, not to mention their ability to sell products in an increasingly protectionist world market . Conclusion

i he major impact of IT is to bring about a re-structuring of global relations . It is most apparent in the process of accumulation in the IT sectors accelerating the centralisation of capital in media, information, hardware and distribution interests . There is an evolving system of power relations based on information . The controllers of information are fostering the ideology of the free flow of information and the tenet that the market provides the best solution to the distribution and creation of information and culture . These controllers of information are gaining ascendancy though they are normally the controllers of capital . Their actions are influencing the distribution of income globally and are generating a new class system centred on stocks, flows and contributions to information . Accompanying the process of accumulation is an evolving distribution of decision-making and jobs . The information economy is related to the distribution of computers which manage information . Data can be transferred at low cost and high speed between computers via satellite links . This development encourages the use of large capacity main-frame computers - the type that are IBM's stock in trade . Small computers feed into larger models . It is no accident that IBM operates the Satellite Business System to perform this function because it sustains the demand for its models . Consequently only a limited number of large main-frames on a limited number of sites are technically required . The outcome is a centralised decision-making structure restricted to a small number of locations . The distribution of the stock of large computers and their manufacture is heavily skewed to the North and, overwhelmingly, the us jobs are associated with this distribution in decision-making, operations, maintenance, development, etc . Consequently, the outcome is to

Information Technology

reinforce the centre-periphery relationship of decision-making and skilled jobs . 23 Another feature of IT in this phase of capitalist development is the necessity for private ownership of information . The information society is still a class society with information entering generalised commodity production . 24 Systems could have been devised that provided greater equality of access to information (including technology) . But the essence of capitalism is exclusion . In an age where it is possible to provide super abundant information there will be (globally) a large class of information-poor, who in turn will be politically and economically weak because they have no access to the abundance of information . At the same time the accelerating commercialisation of culture and the new IT-related delivery systems reinforce the values of capitalism . IT is essential to the development of the capitalist system but these technologies could radically change the nature of the system . I T offers the potential for many Utopian and socialist aspirations . The quantity of necessary labour required for any given level of output can be dramatically reduced with the application of IT. But these prospects are severely constrained by political notions of waged work and leisure plus a general tendency to workerism within those parties based on workers . IT should cause a thorough overhaul of political thinking on income distribution, education, leisure, waged work, retirement, informed by a genuine position on equality . A progressive strategy for IT would emphasise the widest possible access to the technology and the communications networks . The Technology Shops in the Netherlands and the GLC's Technology Networks are examples of bringing information technology into the community . These enable people to learn what the technology is capable of doing and allowing them, with expert assistance, to design equipment and application to suit their own needs . This local approach to IT can help to foster community-controlled projects but cannot circumvent centrally imposed technology environments . The same sort of approach can be applied to local communications networks providing access to relevant data bases, community programming for Tv and radio or electronic mail and consumer information . There is enough space on the new cable networks for these services . The local state has an important part to play in progressive strategies for IT but sooner or later multinational capital must be confronted . The best opportunities lie with defending public control over the communications networks - both telecommunications and broadcasting . Active intervention would allow for a socially determined allocation of resources between net-

103



Capital & Class 104

works and for control over the content and range of `messages' . This is to confront multinational capital directly because of its role as the emerging major allocator of resources in these areas, and by challenging the ideology of the free flow of information through markets . This means to move to a New World Information Order to encompass the needs of the South . Clearly the immediate task is to start in the North with the local state and to challenge at every opportunity the falsehood that our information needs are best served through the market . Such strategies should have an international dimension by opening up local state facilities to poor countries - through training, access to data bases and technology . The alternative is more of the same - capitalist IT . IT really offers the prospects for a liberated, leisured, egalitarian society . But IT remains a capitalist machine and is used to sustain capitalism . The classic confrontation between progressive forces and multinational capital characterises the current position . The costs of the products are falling . Demonstrations of the progressive prospects can be set up, effective and viable projects can be mounted . These can form the nucleus of a campaign to apply IT to social need and Utopian ideals . Notes

1 . Reinecke (1984) . 2 . Bamford (1982) . 3 . `Company Analysis of Direct Exporters', British Business 27 .5 .83 . 4. These figures are derived from London Financial Strategy, GLC . 5 . Reported in the Financial Times, 10 .1 .85 . 6 . This is claimed by David Burnham (1984) . 7. Barker and Downing (1980) demonstrate the impact of word processors on these lines and provide a thorough bibliography . Reinecke (1984) also provides many examples of the impact of IT on control and productivity . Boddington (1973) provides one of the earliest and best analyses of the impact of the computer and uniquely a more optimistic outlook for labour . 8 . Quoted by Forenski (1985) . 9. See Reinecke and Schultz (1983) . 10 . This is Stonier's (1984) basic thesis . 11 . The conflicts over satellites within the West, between East and West ; and North and South are examined in Ploman (1984) . 12 . See footnote 8 . 13 . For a discussion of information as resource see Lowi, `The Political Impact of Information Technology' reprinted in Forester (1980) . 14 . At the time of writing IBM has plans to sell its SBS interests to Mci AT&T's major competitor on long distance communications - in return for a stake in MCI . In this way IBM will directly challenge AT&T in the communication market and have a ready made outlet for its telecommunications equipment . 15 . See Murphy (1983) and references therein . 16 . See Jill Hills (1984) for an examination of the issues .

Information Technology

17 . Wellenius (1984) provides these estimates of economic and financial rates of return on telecommunications investment plus data on differences of telephone density within countries . 18 . McPhail (1981) provides a thorough survey of the issues involved in a NWIO and the role of UNESCO . 19 . Murphy (1983),p . 101 . 20 . See International Labour Report, July-August 1984 and references therein . 21 . See Hoffman and Rush (1980) for data on several countries . 22 . See Atul Wad (1982) for arguments concerning threat to'comparative advantage' . 23 . See Locksley (1983) and (1984) for a discussion on the impact of satellites and IT on the distribution of decision-making and jobs . 24 . See N . Garnham (1981) and (1983) on the class issue and the commercialisation of culture . References Bamford J . (1982) The Puzzle Palace (Sidgwick and Jackson) . Barker J . & Downing H . (1980) `Word Processing and the Transformation of the Patriarchal Relations of Control in the Office', Capital and Class, No . 10 . Boddington S . (1973) Computers and Socialism (Spokesman Books) . Burnham D . (1983) The Rise of the Computer State (Weidenfeld and Nicolson) . Forenski T . (1985) `us Bank Assigns $5 billion to IT', Computing, 7 .2 .85 . Forester T . (1980) (ed .) The Microelectronic Revolution (Blackwell) . Garnham N . (1981) `The Information Society is also a Class Society' . Paper presented to EEC Conference on the Information Society, Dublin . Garnham N . (1983) `Public Service Versus the Market', Screen Vol . 24, No . 1 . Greater London Council (1985) London Financial Strategy : Consultation Document (GLC) . Hills J . (1982) `Foreign Policy and Technology', PSA Conference Paper . Hoffman K . & Rush H . (1980) `Microelectronics, Industry and the Third World', Futures, Vol . 12, No . 4 . Locksley G . (1983) `The Political Economy of Satellite Business', Telecommunications Policy, Vol . 7, No . 3 . Locksley G . (1984) `Information Technology and Cities as job Providers', Cities, Vol . 1, No . 3 . McPhail T . (1980) Electronic Colonialism (Sage) . Murphy B . (1983) The World Wired Up (Comedia) . Nora S . & Minc A . (1978) The Computerisation of Society (MIT Press). Ploman E . (1984) Space, Earth and Communication (Frances Pinter) . Reinecke I . (1984) Electronic Illusions (Penguin Books) . Reinecke I . & Schultz J . (1983) The Phone Book (Penguin Books, Australia) . Saunders R .J ., Warford J .J . & Wellenius B . (1983) Telecommunications and Economic Development (John Hopkins University Press) . Stonier T . (1984) The Wealth of Information (Thames Methuen) . Wad A . (1982) `Microelectronics : Implications and Strategies for the Third World', Third World Quarterly, Vol . 4, No . 4 . Wellenius B . (1984) `Telecommunications in Developing Countries, `Finance and Development' (IMF) .

105

106

Communist Resistance in Nazi Germany Allan Merson

The first overall history in English of the only party to offer systematic opposition to the Nazis throughout the Third Reich ; draws on sources from both East and West Germany . £l5 bb illustrated

The Peculiarities of the British Economy Ben Fine and Laurence Harris

An analysis of the problems faced by the British economy in the light of the unique history of capitalism in Britain - the first country to have a unified market and the first to industrialise . £7.50 pb

£l5 hb

Britain, Fascism and the Popular Front' Jim Fyrth (ed.) An examination of the Popular Front and the reactions it produced on the left, the cultural upsurge it stimulated, its effects on anti-imperialist politics in India and Ireland, and women's involvement in anti-fascist politics . Contributors include Noreen Branson, Monty Johnstone, Margot Heinemann and Eric Hobsbawm. £5 .95 pb £15 hb

The Nottingham Labour Movement, 18801939 Peter Wyncoll Foreword by John Saville

Traces the history of the movement from the New Unionism to the late 1930s, including the General Strike and the struggle against Spencerism ; it explores the area's moderate traditions, recently underlined by the Nottinghamshire miners in the 1984-85 strike . £4 .95 pb illustrated

Radical Aristocrats Ken Fuller

A history of the London busworkers from the 1880s to the 1980s . The author, himself a bus-driver for 12 years, examines the development of one of the most important rank-and-file movements in labour history . £4 .95 pb illustrated

6

LAWRENCE & WISHART LTD 39 MUSEUM STREET, LONDON, WC IA 1LQ TELEPHONE : 01-405 0103

Vasso Manitea Tsapatsaris

Crisis in Greek agriculture : diagnosis and an alternative strategy Introduction • THERE ARE TWO stereotype images of agriculture . One is the mass producing, chemical and machine intensive, large landowning, ecologically and nutritionally diastrous juggernauts of multinational agribusiness . The other is the small, landowning, indebted peasant eking out a miserable existence from exhausting work on crops and soil, oppressed by the ranks of merchants, creditors and the state. But what really happens when these two systems are brought together? The answer may be found in an analysis of the Greek agriculture and this is the aim of this paper . THIS PAPER examines the effects of Fordism, which is discussed below, on peasant agriculture in Greece . It argues that the two systems did not become compatible . Standardised technology designed for the production of mass standardised commodities was deemed to be inappropriate for multicultivated crops on fragmented and small landholdings . It has promoted the disappearance of smallholdings in favour of larger farms and has displaced labour without increasing output significantly . As defined by incremental capital-output and capital-labour ratios, agriculture has become more capital-intensive than manufacturing industry and state subsidies bear the increased costs of inputs

This paper is concerned with the impact of Fordism on the development of Greek agriculture . Drawing upon historical and contemporary data, the author argues that the importance of technological change and transformations in the labour process of agriculture production have often been underestimated or seen purely in technical terms . Such one-sided accounts 107 are comprehensively criticised and an alternative account is provided which emphasises broader class, social and political conditions .

Capital & Class 108

which are promoted by multinational companies . Some of the above issues have given rise to concern and the following two views are worth considering . One hypothesis is that there has been a strong increase in cost prices combined with a downward pressure on agricultural (producer) prices, resulting in declining output . It is interesting that this hypothesis falls within the view' that sees the problem of agriculture mainly as an issue of surplus transfer away from agriculture . Here, emphasis is placed upon the scarcity of natural resources . This scarcity is considered in a Ricardian manner, as an obstacle and as a virtue but not for the reasons suggested by Ricardo . It is an obstacle because the marginal productivity of land falls with intensive land use and growth in agriculture comes to a halt . It is a virtue, because peasants have a monopoly over a scarce factor, land, and can enjoy a monopoly rent . The loss of this rent in the form of surplus transfers to the capitalist sector (or abroad) limits the development of peasant agriculture . The merit of this view is that it considers physical limits to growth which, in our view, can be reached much more quickly if `inappropriate' technologies are applied and given that the supply of arable land is relatively fixed, which is broadly true in the Greek case . A significant weakness of this view, however, is that the processes of production and exchange are not analysed together . This tends to underestimate the features which most crucially explain this crisis . Namely, it loses sight of the pressures imposed by capital particularly upon the production process of agriculture and the simultaneous reaction of the peasant structural elements, illustrated by their resistance to change as well as by their deformation . It does not, therefore, consider how the intersection of these features overdetermined the crisis of agriculture . Consequently, it is not within its logic to suggest why, now that agriculture is in disarray, `the old is dying', alternative technologies and production should develop in favour of the peasant and the consumer to counteract a capitalist transformation of agriculture . Moreover, a higher capital-output ratio in agriculture than in industry does not support a shift of surplus from agriculture to `capital in general' . Rather, the terms of trade indicate an occasional surplus transfer from agriculture to multinational oligopolies that produce these inputs and to those coordinating and promoting their interaction . In general, however, as the organic composition of capital in agriculture came to exceed that of industry it may be unrealistic to think in terms of Ricardian or Marxist theories of monopoly rent . It is more likely that government subsidies and investment had forced other strata in society

Greek Agriculture 109

to carry part of the burden . The view of the present government as expressed in the Five Year Plane sees the gradual removal of input subsidies that tended to increase differentiation within the peasantry and argues instead for an expansion of investment . This is an attempt to harmonise with EEC policy, counteract previous policies, which had favoured subsidies on intermediate inputs and credit, and to move towards the expansion of investment, which fell substantially during the '70s, within a more equitable policy . This view, however, calls for more investment as well as for a higher output and exports without providing the mechanism that will prevent the two goals from becoming mutually exclusive . In our view the causes of this long-term, structural crisis in agriculture derive from the way the peasant economy has been subjected to Fordist technology and standardisation . These `inappropriate' technologies for this form of production rendered it unable to respond to the Fordist food system . It thus became `inefficient' relative to Fordist requirements . In what follows we present our reading of this crisis in agriculture and examine the powers necessary to confront it . We argue that there are alternative ways of developing technology within an alternative food system which have different implications for peasant labour and the consumer .

(a) Fordism and the Greek Economy Despite their differences, a number of writers have come to describe the epoch stretching from the end of the 1930's crisis to 1970's in the developed countries as State Monopoly Capital, 3 Late Capitalism° or Fordism . 5 Fordism 6 is the production of mass produced standardised goods based on the principle of flow line assembly, and continuous production of standardised parts . It represented a new labour process, fully mechanised and based on semi-skilled work . This work was timed on a production line with higher wages as a compensation for the increased control of capital over production . With higher wages workers were able to buy standardised commodities which they themselves produced . So, new patterns of consumption emerged which centred around the average undifferentiated taste of the auto-house-private family unit : consumer durables, canned food, package holidays, etc . Standardisation became, therefore, the essence of the Fordist `mode of consumption' which matched perfectly the standardisation of Fordist techniques and the mass character of production . With Fordist production there was also an inbuilt incentive to maintain aggregate demand in the economy . In this sense,

The integration of Greek agriculture into the Fordist food system

Capital & Class 110

Keynesianism - the fiscal and monetary role of the state - was closely associated with Fordism . The spread of Fordism in the international economy as a new stage of capitalist production as well as a new `mode of consumption' took different forms . Perhaps the most important lesson from Fordism is that there was no inevitability in the form it took . The forms of resistance, the national configuration of class, the deep roots of petty commodity production in industry and land, the low level of accumulation in manufacture, the strength of bourgeois but pre-capitalist early forms of capital (merchant, credit), the structures of the state, all affected the way in which the era of Fordism became bound into the Greek social formation . Here, only a brief and very inadequate summary of events can be given . From the early 1950s the Greek government's aim was to expand industrialisation through foreign capital, over which they had no effective control . Consumer-good, and particularly intermediate-good industries (like metals and chemicals), became staging posts for multinationals . For many years government policy provided the most generous range of incentives for foreign capital but a capital-goods industry did not develop . The result has been a steep rise in imports as the Greek economy remained dependent on international Fordism for many intermediate goods, all its capital goods and a substantial range of consumer durables . Evidently, Greece embraced Fordism from a position of weakness . Domestic, labour-intensive industries expanded with the imported machinery and by diversifying from, or subcontracting and mixing with foreign capital, had not been destroyed . The `monopoly sector' as the main generator of surplus in the economy, was subsidised to import capital goods and higher real wages soon changed the `consumption mode' of the Greek society . By the end of the 1960s the development of tourism (concomitant upon the rising wages in the core Fordist countries), revitalised traditional industry and trade and reinforced Fordist consumption around the 'auto-household' unit . Without a Welfare State, government policy developed on the basis of a weak and narrowly-based Fordist production and a relatively strong Fordist `mode of consumption' . It developed partly as a link between the local economy and international Fordism and partly as a complement to Fordism . At all events, agricultural policy was crucial in the integration of peasant agriculture into Fordism . For Fordism's influence extended beyond industry to infrastructure improvements, urbanisation, trade, finance and the traditional forms of production .

Greek Agriculture (b) Fordism and peasant agriculture The main characteristic of Fordism with regard to agriculture was to incorporate the agricultural sector of most Western countries into its food production system . It phased out natural seeds, crop rotations, mixed farming and simple machinery and introduced high yielding seed varieties responsive to agrichemicals and new standardised machinery . 7 Primary production grew as land concentration and economies of scale grew bigger . However, production grew by restricting varieties within crops and hence through standardisation . Part of this shift to crop standardisation has been compliance with food companies which had specialised technology and so inflexible production lines producing a standardised final product . And part of the reason for the shift to standardisation has been consumer demand for standardised products artificially created by advertising . 8 So, because of Fordist undifferentiated consumer needs and because capital invested in food production was vertically integrated, with several of the largest companies having interests in seeds 9 and agrichemicals 10 as well as refining, processing and wholesale distribution, agricultural activity became integrated into the food system . But because this economic integration was paralleled by a very high degree of energy intensive technical integration, farming was made very inflexible . The subjection of Western agriculture to vertical integration and very particular technology ensured high profits during the high demand, cheap inputs and cheap energy years up to 1973 . Greek agriculture, however, has not been subjected effectively to vertical integration for a number of reasons . Firstly, Fordist technology has not provided for flexibility and variation required by Greek social and physical land conditions . The size, fragmentation and multi-cultivation of most landholdings prevented crop standardisation in any significant supply or continuity of supply . But secondly, once introduced, particularly in the form of agrichemicals, Fordist technology was much more successful in increasing costs and labour displacement than in expanding output . Thirdly, even in areas where standardisation was possible it failed to face sharper international competition in an adequate manner . Fordism, particularly international Fordism, encompassed peasant agriculture in an incomplete and inefficient way . Its view was limited because its standpoint was technological to the exclusion of the social . It started from the market imperatives and the economy of time rather than from the lives of peasants and their social needs . It could not use effectively the structural elements of the peasant structure which for years served the needs of the

111

Capital & Class 112

peasant family . Obviously, small landholdings, land multicultivation and multi-fragmentation had not acted as obstacles to the satisfaction of the aim of reproduction of the peasant unit . Quite the opposite . Multi-cultivation delivered a variety of products necesary for self-sufficiency when peasant production was predominantly production of goods for use . This diversity in cultivation was a condition for subsistence even when production for the market became much more essential and hence income and surplus became price-determined . Multi-cultivation was here decisive in four ways : first, it tended to protect peasants against demand fluctuations ; second, it offered flexibility against risks and the possibility of earning an extra revenue on those crops that were cultivated under favourable conditions relative to similar crops grown under unfavourable conditions ; third, it tended to improve the bargaining position of the peasant vis-a-vis merchant and credit capital, and his ability to reduce market pressure by occasionally going back to direct production ; fourth, it was compatible with intercropping and symbolic cycles over time (e .g . grains followed by legumes), which increase productivity per hectare . Land fragmentation was also essential for the peasant system . It enabled the genetic reproduction of the peasant family through inheritance laws . From the peasant viewpoint, the size of the landholding did allow for subsistence, however poor that was, in a period of industrial under-development and meagre alternative employment prospects . In practice, of course, there had often been a surplus population which was displaced outside the land . This was partly due to physical limits to growth intrinsic to the peasant system and partly due to the appropriation of surplus by merchant and credit capital . It is interesting that the peasant system developed significantly with the development of competitive industry and has been essential to capital accumulation mainly because it helped subsidise the low wages of industrial workers . Its structural elements became barriers and therefore `inefficient' when it proved unable to fit into the Fordist system of food production . Hence, Fordism challenged the specificity of the peasant structure while it remained impotent to reform it and instead it produced a deep crisis whose ideological side is not insignificant . Fordism wove a powerful web which sought to `teach' peasants to regard Fordist technology and consumption as a mark of superiority . This explains why it succeeded unchallenged in bombarding an area of the Greek economy that had only limited scope for improved productivity under costly inputs designed for scale economies . And so, when it raised the social cost of agricultural activity and set an aim foreign to it, the aim of standardised

Greek Agriculture

output, which peasant agriculture could not effectively achieve, the blame fell on the `anachronistic' structure of the peasant economy . But for the reasons given above, and unlike agriculture in the Western developed countries, peasant agriculture in Greece could not become a material base in the Fordist task of creating a coherent, technically and economically, integrated standardised food system . The distribution of intermediate inputs and a study on seed production'' in Greece indicate that it was mainly in the 1970s that seed varieties had been imported while until 1979 seed production in Greece was organised by the state . It is unfortunate that the state had to withdraw from this area in order to follow EEC regulations . As already noted, imported seeds have been bred and patented by multinational agribusiness to respond to chemical fertilisers and respond poorly to `organic' farming . The Greek seed varieties, however, had no significant importance for the capital invested in the fertiliser and chemical industries since they result in greater variety within crops and this is incompatible with Fordist food processing technology . In other words, most food processing technologies in the Fgrdist food system were unable to process a wide variety of inputs - the machine works only with uniform raw inputs . 12 The pressure for uniformity intensified, however, especially after Greece entered the EEC, and a slow integration of the genetic structure of Greek plants and animals into the Fordist food system has taken place, i .e . wheat, barley, maize, tobacco, oranges, lemons, vineyards, et al . 13 A study for the Ministry of Agriculture on `The Circulation of Agricultural Products, Imports/Exports', indicates this pressure and analyses the obstacles to standardisation . At the level of production standardisation is countered by land fragmentation, small land size, short and unstable supply ; at the level of circulation standardisation is countered by an insufficient infrastructure, commercial and marketing services and the presence of many small merchants . Yet, apart from the social even the physical conditions of the Greek land economy acted as weak links in the Fordist technology and standardisation . Such weak links, for instance, have been the mountainous character of many regions which restricted the size of cultivated land and the absence of ample water supplies . 14 The chief characteristic of high yield seeds is that with an ample supply of irrigation water they are much more responsive to inorganic fertilisers than traditional varieties . This explains why expensive irrigation systems have been necessitated recently in Greece and why the need for adequate water supplies favours some areas, like Thessaly, at the expense of others . It is, thereL:Y.:C:

27 H

113



Capital & Class 114

fore, fortunate that seeds appropriate to `organic' farming have not become practically extinct, like in other countries, e .g . Britain . 15 And this, not only because high yield seeds are water and energy intensive and the property of the biggest multinationals . They are also `risky', since they are less diseaseresistant than traditional varieties and so require insecticides and fungicides for optimal husbandry . It is unfortunate, however, that there has been such a big shift towards chemical fertilisers . For it is now widely accepted that increased applications of chemical fertiliser reduce natural soil fertility and result in diminishing marginal returns .' 6 It has been argued that apart from irrigation technology, the technological innovations surrounding the introduction of new high yielding seed varieties (the biological and chemical inputs) are scale-neutral because they are easily divisible ." This is simply not true, since it is scale economies that dominate factor price considerations in capitalist agricultures for which Fordist technology was designed . In Greece, standardisation proved ineffective because it could not generate scale-economies and so it became too costly . The basic argument here is that intensive cultivation must yield economies of scale if it is to be efficient in reducing costs and so prices . But while per unit costs could only decline over a greater volume of inputs, a greater volume could in turn lead to diminishing returns . Accordingly, per unit costs did not decline in relation to capital advanced and the capital-labour ratio as well as the capital-output ratio remained high . Such a rise was labour displacing and the cost of this has been a further increase in the capital-labour ratio . Ironically, the pressure for increased standardisation and exports intensified when consumption patterns in the Western markets were in decline and in the process of transformation . This and the oil price boom of 1979 worsened the competitive position of Greek products . On the whole however, the effort failed because it did not take into account that advances of productivity under Fordism were about the corporate planning of a large integrated food system, not just the working of a single machine, a single type of fertiliser or seed . Thus, if small private ownership is a wrong bit in this system, as the Greek landholding is, the market will fail or take too long to engineer a reorganisation of private ownership into units more adequate for the Fordist food system . It would rather disorganise the peasant structure without transforming it and this will furnish everybody with ambiguity about the possible outcomes . The crisis of petty commodity production on the land has an The crisis of Greek agriculture economic, social as well as a politico-ideological dimension . `The

Greek Agriculture crisis consists', as Gramsci wrote, `precisely in the fact that the old is dying and the new cannot be born ; in this interregnum a great variety of morbid symptoms appears' . 18 To outline the features whose intersection overdetermine this upheaval, we start with an analysis of the `morbid symptoms' by looking at : (a) changes in employment ; (b) changes in the number and area of landholdings ; and (c) changes in technology and their effect on the capital-output ratio .

(a) Changes in employment In 1951 active agricultural population accounted for 51 .4% of Greece's total active population . The German occupation and the Civil War arrested any change in the land economy and this permits the assumption that the conditions of 1939 19 remained largely the same until the mid-fifties : direct family consumption formed 80% of total consumption expenditure and direct production accounted for 85% of the value of means of production . 20 Commodity exchange was thus little developed . Production was geared more towards the satisfaction of self-sufficiency through the production of goods for use than the production of saleable goods for revenue . But for the purchase of 15-20% of nonagricultural inputs, the peasantry had to sell 40% of its agricultural produce to the urban sector,21 a clear evidence of the pressure exercised upon it to increase its surplus product . This pressure, however, could only be exercised indirectly through the level of surplus demanded, allowing producers an important degree of flexibility in how they would meet that demand . Therefore, peasants could regulate their work to take account of their needs and reproduction could be accommodated to the demands of production, subject to physical variations - climate, land fertility, water availability and population change . The increasing decline of direct consumption and direct production with the development of commodity exchange would soon pose a severe threat to the old family cohesion and the survival of many landholdings . Direct food consumption fell significantly from 66% in 1957 to 24% in 1974 . 22 This fall was unequally distributed between regions and size of landholdings . For instance, it is estimated that in 1975 direct food consumption in all food consumption in Crete was 39 .7% for medium size landholdings . 23 Overall, however, the decline in direct production and consumption contained an interplay of progressive and destabilising elements . On the one hand, it unleashed an increase in output and a widening of human experience . On the other hand, it meant a profound disorientation and insecurity . With

115

Capital & Class

116

the safeguard of subsistence production gone, there was a growing inability to combat inequalities within agriculture and to strengthen the position of small landholdings in particular against risks and pressures from outside . These destabilising elements had significant effects on employment . It is estimated that in 1969 the share of labour requirement in total production expenditure was reduced to 30%. 24 This involved a massive reduction in the number of active peasants : their share in total active population fell from 51 .4% in 1951 to 47 .1% in 1961 and then to 35 .5 and 27 .4% in 1971 and 1981, respectively . This reduction had also been distributed unequally between regions and landholdings . It tended to favour better prospects in alternative occupations . Nevertheless, if migration to the cities proceeded at historically unprecedented rates, a large part of the explanation can be found in the economic stagnation of the poorer land areas . The average annual rate of peasant decline was -4 .2% in the 1961-1971 period and only -1 .4% between 1971-1981 . 25 This recent slow decline was not only based on shrinking urban opportunities but also, and more crucially, on the subjection of the countryside to such extensive change and at such a rapid pace that secondary occupations in alternative jobs were made available locally . Thus, the share of `full-time' peasants (working for more than 140 working days per year), in total employment in the economy was as low as 25% in 1980 . 26 Admittedly, it is difficult to know the exact number of active peasants . 27 A first problem arises because different definitions are used by the Censuses of 1971 and 1981 . A second problem is that figures are not weighted to account for the unequal distribution of active peasants between regions . But perhaps the most important problem is ambiguity with respect to the classification of `part-time' peasants, i .e . those who keep their landholdings but are also wage-earners . For instance, a sample survey carried out by the National Statistical Service and the Ministry of Agriculture for 1977 estimates 865,700 `full-time' peasants (28 .8% of the total active population), and leaves out 238,700 peasants whose main occupation is still in agriculture but who worked on the land for less than 140 working days per year . Quite apart from the accuracy of the numbers one trend is, however, obvious : the spread of money-commodity relations and of mechanisation, which introduced the compulsion of the market on the peasants and reduced their labour input per unit of output, broke up the cohesion and stability of social relations on the land . One form of this break up was the emergence of the , semi-peasant, semi-wage earner', whose sociality is divided between two worlds, whose future is unknown and whose past is

Greek Agriculture

disintegrating . Another was the flight of the young away from the land which left around 45% of the land to peasants over 55 years old . 28 A third was the emergence of land concentration through ownership concentration and particularly through the lease system . (b) Changes in the number and area of landholdings

In 1981, the average landholding in Greece was still characterised by its very small size (about 36 .1 stremmata, i .e . below 5ha), split on average into six to seven plots of about 0 .6ha, and producing five to six different crops . This structure reveals the stability of the peasant landholding, despite the outflow of peasants from agriculture . The small and medium-size landholdings remained predominant throughout the post-war period : in the years 1961, 1971 and 1977 their per cent share in the total number of landholdings was 95 .97, 95 .94 and 93 .60 respectively. 29 Their relevant land share in total land for the same years were 79 .86, 75 .32 and 69 .16 per cent . 30 This relative stability, however, went hand in hand with peasant inability to defend the absolute number of small-medium landholdings : Table 1

Percentage change in the number of landholdings and their area 31 1961-1977

Categories Small Medium-Small Medium Medium-Big Big Very big Total

Size (str .) <30

% number change % area change -20 .28

-21 .53

30-49

-21 .94

-22 .89

30-99

-18 .04

-17 .35

50-99

-12 .79

-13 .08

100-499

+30 .13

+39 .75

+114 .28

+93 .37

-17 .41

-6.06

>500

Moreover, this relative stability went hand in hand with some land concentration and, more significantly, with the transfer of about 60% of the area of abandoned landholdings to landholdings with more than 100 str . 15 Also, it is estimated that around 200,000 landholdings, which cover 16% of peasant land, are owned by non-peasants ; around 462,000 hectares are under non-peasant management, whilst 208,000 hectares are not cultivated by their peasant owners . 16 There is an interesting analysis of socio-economic changes in Mavromati, a Greek village in Viotia, 17 which shows that the lease of land to richer peasants enabled the latter to improve their

117

Capital & Class 118

economic and social position and with the help of government subsidies to acquire expensive mechanical equipment which was rented out to those who could not afford it ; it traces the destruction of small-scale cultivator, the uncertainty of the `part-time' peasant and calls attention to the destabilising effect of the new pattern of land and wealth concentration on the whole social and political fabric of a traditionally homogeneous rural society .

(c) Changes in technology Apart from the social, the economic crisis in Greek agriculture is by now a bitter reality whose acute manifestations are smoothed out only by substantial state support . This crisis began in the late '60s after a supposedly successful period of growth within an overall Fordist regime. Since the early '70s the Fordist regime itself entered into a long-term period of crisis which in turn intensified the crisis of Greek agriculture . There is ample evidence that since 1965 Greek agriculture became capital intensive as machinery, chemical spray and chemical fertiliser application increased rapidly . The number of machines (tractors and combine harvesters) used rose slowly from 1,080 in 1938 to 6,900 in 1952 . But it went up to 29,780 in 1961 and rose dramatically during the '60s to reach 116,372 in 1972 . 35 Six years later there 201,000 machines in operation . 36 At the same time the application of chemical fertiliser leapt from 15 kilos per hectare in 1950 to 38 in 1960 and 93 in 1970 . 37 The share of irrigated land in all arable land also increased from 6 .7% in 1950 to 20 .0% in the 1970s and for some crops (vegetables and cotton), to 70-80% . 38 The share of these inputs in total costs also increased rapidly . For instance, the share of chemical fertiliser and other sprays in total costs ranged from 2 .3% (cotton) to 16 .2% (orange trees) in 1964 . The annual rate of growth of chemical fertiliser was 13% in the 1955-64 decade but since then it had a steep rise . 39 A contributing factor to the introduction of those inputs has been public expenditure on those inputs and on infrastructure . Understandably, combining labour displacement and peasant outflow in search of alternative opportunities, the increase in the capital-labour ratio grew rapidly . After all, the 1960-70 decade was one in which the public sector role in agriculture was drastically expanded . Based on constant 1958 prices, total investment tended to favour this sector :

Greek Agriculture 119

Table 2

1951-60 1961-70

Million drs 40 Agriculture Manufacturing 14,571 15,805 37,720 45,401

Indeed, the share of investment in agriculture in total investment grew more than the relevant share of industrial investment since 1959 and beyond ." Less self-evident, however, has been the high increase in the capital-output ratio42 which rose more rapidly than the capitaloutput ratio in manufacturing and particularly since the early '60s . Table 3

1959-62 1963-66 1967-70

Marginal capital/output ratio 43 Manufacturing Agriculture 1 .67 4 .10 1 .61 3 .75 9 .23 1 .41

The failure of the capital-output ratio to counteract the rise in the capital-labour ratio is perhaps the strongest evidence of a deep economic crisis in Greek agriculture . This does not mean that output did not grow . Today, Greece is `self-sufficient' in almost all agricultural products with the notable exception of animal products . But output grew by less than capital and much less than industrial output : Table 4

Agriculture Industry

Annual growth of output at constant prices 44 1961-70 1971-77 1951-60 3 .3 1 .3 3 .4 8 .8 6 .0 7 .1

While in 1965 the share of industrial production in GDP (22 .2%) was slightly higher than the agricultural contribution to GDP (21 .9%) by 1977 the contribution of agriculture had been reduced to 14 .1%, the lowest contribution of all sectors in the economy . The fact that the proportion of agricultural employment to the total employment was higher than the proportion of agricultural output to the total output reflects the relatively low levels of labour productivity in this sector compared with that in

Capital & Class 120

manufacturing and other sectors of the economy . It appears, therefore, that agricultural productivity suffered partly because the introduction of heavily mechanised techniques and of biological (hybrid seeds) and chemical (fertilisers, pesticides, insecticides, etc .) innovations was not only often ill-suited to the physical environment but also had the effect of displacing labour without necessarily lowering per unit costs of production . In Greece, as in the rural areas of most developing nations where land parcels are small, peasants using capital-intensive techniques of production could not rely on `economies of scale' to reduce unit costs and maximise output and revenue . 45 Under such a process the growth of capital tended to exceed the growth of output and the 'capitaloutput' ratio failed to counteract the increase in the capitallabour ratio . There is a lot of scepticism about the worthiness of the above capital-output ratios for agriculture (Table 3), because capital includes significant public investment in land reclamation and irrigation . In our view, this scepticism is unfounded since the very nature of petty production made public investment the most crucial factor of an expanded production and reproduction on the land . However, G . Mergos shows that capital grew by more than output in agriculture even when figures are adjusted for public investment in land reclamation and changes in employment : Table 5 Marginal capital/output ratio

Period

Without Pi in R' Unadjusted Adjusted 2

With Unadjusted

Pi

in R 2 Adjusted 2

1951-60

1 .69

1 .94

2 .23

2 .56

1960-70

3 .20

2 .11

4.08

2 .70

1970-75

3 .58

2 .52

5 .38

3 .77

investment land reclamation 2 . Adjusted for changes in employment 1 . P1 = public R =

Source: Mergos, G . I . (1980) Fixed Capital in Greek Agriculture, PASSEGES, p . 93, Athens (in Greek) . Moreover, G . Mergos argues that the adjusted ratios in column 2 of Table 5 would be smaller only if the estimated value of capital goods directly produced by the peasants is included in the calculation of the incremental capital-output ratios . In this case, the ratios would be 2 .01 instead of 2 .11, and 2 .20 instead of 2 .52 for the 1960-70 and 1970-75 periods respectively . 46 It

Greek Agriculture

121

appears that direct production, being very significant up to the early 1960s, adds more to output than to capital . Even in this case, however, the agricultural ratios still tend to rise above the relevant ratios of manufacturing, and particularly in the 1970-75 period when direct production is heavily curtailed . If we are to see the Greek state as it depended upon its relationship to the dominant classes and as it was conditioned by class struggle we may say that state policies aimed at counteracting unevenness in the Greek social formation . In other words, the production of surplus value in the industrial sector, and particularly in the industrial sphere dominated by big capital, determined in a significant way state activity, owing to the inherent tendency of big capital's accumulation to undermine the foundations of petty production on the land . Consequently, state activity in the social formation tended to facilitate the requirements of surplus value production and the valorisation of big capital . For instance, public investment and state controlled credit to agriculture played a central role in making possible a sustained accumulation of capital . On the other hand, this state activity was controlled by peasant struggles, given the extensive economic and political weight of agriculture in the Greek society and the ideological character of the peasantry, whose main aspect was belief in and fight for property . Thus, the relationship of the state to the economic reproduction of petty land property was subject to the pressure of petty producers reacting against their being thrown off the land as well as the pressure of big capital reacting against an inefficient land production . The means by which this relationship was effected up to 1967 were public investment, incentives, control of the Agricultural Bank of Greece and the `price support system' . The `price support system' was supposed to protect the living standards of peasants by administering minimum prices in such a way as to help peasants cover their costs of production . But, in fact, prices increased or decreased depending on the peasant struggle . Thus, it was only when peasant struggle was successful that the most inefficient holdings were able to survive . In the period of the Junta (1967-74), however, it was simply impossible to save their plots, for the price support system was virtually replaced by freedom in price formation . Even in this case, peasant resistance against high debts to the Agricultural Bank of Greece compelled the Junta to assume outstanding debts . But state effort to introduce land transferability or 'mobility', culminated in the law decree 481/1968, imposing upon all peasants the acquisition of titles of land ownershiop and the right to transfer their land ownership . Yet, the resistance, and in this cs
The crisis of policy

Capital & Class 122

period the political radicalisation of peasants prevailed and prevented this outcome . Hence, law 29/1935 was used which was an instrument, among other things, for the determination of the regional distribution of industry, since a permit was required for the establishment, location and relocation of a business . Permits were given, however, for the development of tourism and this together with the unequal distribution of infrastructure accounted for the increase in the price of land in such favourable areas, in particular . Obviously, the increase in the price of land was used as an incentive for peasants to sell their land . Following the fall of the Junta all policy propositions and drafts put forward also aimed to transform small land ownership through a free price system, the formation of big agricultural companies with combined participation in shares of industrial and peasant `capital' or land, and the public appropriation of abandoned land . 47 These plans, however, faced the resistance of peasants over landownership, while the `price support system' was brought back . Consequently, new efforts to transform the land economy assumed the form of reducing public expenditure and investment . All in all, the economic reality of landed petty production continued to be contradictory to the accumulation of industrial capital and its requirement for cheaper agricultural prices, labour, and its eventual expansion in land . To summarise, the most evident feature of government policy in the sixties and seventies was increasing agricultural supply through productivity advances . But it was from the first always more than a policy to encourage productivity . It had a more general anti-small ownership bias directed against the `real' foundations of petty commodity production on the land . The essence of this policy was four-fold : (a) accelerating and steering technological change through Fordist inputs and requirements ; (b) cutting public long-term investment and imposing the international market on the peasantry by actively participating in organising the delivery of new inputs to the agricultural sector ; (c) weakening traditional consumption patterns and community relations in the countryside by redistributing income (and wealth) to more 'capital-intensive' landholdings ; (d) introducing population shifts away from agriculture and encouraging multi-activity often through market deregulation, poor social benefits policies and tourist incentives . We have already mentioned that the most general effect of this policy has been labour displacement and high prices since the losses from costly forms of technology and product standardisation tended to far outweigh the savings from reducing labour

Greek Agriculture

costs, i .e . subsistence and labour requirements . In as much as this policy, however, aimed to engineer peasant differentiation the results are evident, despite the failure of statistical surveys to show the intricacies of income patterns within agriculture . Yet, the Fordist `mode of consumption' - the autoconsumer durables, private household complex - is now evident in the countryside, as well as its destructive impact on traditional consumption patterns and the non-commodity relations between people . Moreover, the decline in demand for domestically produced food products and the rise in imports 48 reveals the overall influence of Fordist consumption on food . In spite of its obvious adverse effect on the Greek agriculture and food industry, government strategy played no major role in stimulating a food policy . Without such a policy, agricultural development simply widened the gap between the larger landholders and the very small landholders : the returns to public credit funds, to supplies of high yielding seeds from government seed bulking stations, to capital invested in irrigation and infrastructure schemes were likely to be the highest when these were allocated to the best landholdings and the most fertile areas . While such a policy stimulated the growth of output it tended to concentrate rural power in certain groups ; to create false expectations for rapid improvements in the standard of living ; to increase consumption at the expense of re-investment ; 49 to create pressures for the development of larger - capitalistic - units ; to progressively increase the numbers of `fake' peasants, part-time peasants and aged peasants ; and to force every government - irrespective of different intentions - to retain political support by reinforcing this `well being' as a tangible evidence of progress . Thus, an agricultural policy designed to transform the land economy - its production, technology, social relations and the whole balance of different sectors in the economy - has appeared simply as an agricultural policy aimed at improving productivity . Even when the nature of policy changed as a response to peasant protest it has been about two things : (a) improving productivity through subsidised inputs and credit ; (b) setting prices and subsidies at high levels and writing-off debts to prevent peasant income and employment from falling . The fact that aims (a) and (b) were contradictory and that aim (a) obscured the crisis that Fordism imposed was rarely recognised . Thus, the crisis of Fordism and its wasteful mode of technical innovation by permanent devalorisation leading to inflation intensified the problems of peasant agriculture .

123



Capital & Class

124 Considerations for an indigenous food system - a food policy

When the Panhellenic Socialist Movement (PASOK) came to power in 1981, they took a firm stand in favour of the peasantry . They were concerned primarily with the general level of spending in the land economy (the demand side), in a successful effort to increase agricultural income and pensions and to sustain employment on the land . The point about PASOK'S policy, however, is that while a policy on interest rates, on investment, on the level of demand, on public works and protection may all be necessary, they can only make long-term sense and truly work for the peasant if they are part of a wider strategy centred on the material aspects of the land economy . Of course, the theoretical strategy of PASOK for production, which is also a long-term answer to the low level of productivity, is the formation of co-operatives in agriculture . Now, the establishment of new forms of production do need state support but they mainly need the support of the peasantry and those who use their products, i .e . the consumers . It is unfortunate, therefore, that the formation of co-operatives at the level of production encounters the resistance of the peasantry as indeed even the development of market co-operatives faced many difficulties and contradictions . It is conceivable, however, that co-operatives might be formed and helped by decisive state measures in support of a more general strategy for production which is required and which takes on the question of restructuring . This question, in conditions of present-day Greece, needs to move away from the issue of `plan versus the market' not merely because it is unrealistic but also because it deals only with allocative efficiency . Rather, it should move from alternative forms of allocation to alternative strategies of production which do not ignore the market but which recognise broader social, long-term interests of the peasant and the consumer . It is true that a change in government cannot insulate peasant agriculture from the dominant mode of production in the capitalist world . But a policy which has learned from the limitations of the past should start from the principle that products and technologies have social dimensions and what satisfies the need of one system may be inappropriate for another . Japan and Taiwan have very small landholdings like Greece but have succeeded in neutralising at least the scale bias of Fordist technology while applying Fordist techniques by reinforcing traditional community values and hence by encouraging group farming without abandonment of private property rights . In fact, Japan used the highest application of inorganic fertiliser in the world before the oil price rise . But with group farming, costs spread over a larger land and output and higher yields reduced the total cost and energy requirement per ton of produce . 50 As a result, productiv-

Greek Agriculture

ity increased by 6 .2% per year in the 1965-79 period . This illustrates that the choice of technique is a genuine socio-economic one . 51 In countries where the culture of co operation has been weak or has been degraded and mutual activity as well as land reform is resisted, the development of `appropriate' techniques and technologies should be closely tied up with the development of `appropriate' products . In this case, a new food system develops . Since 1980, for instance, French policy promotes research to increase the productivity of the agribusiness and agro-energy sector and to lead to greater independence for the agricultural sector by reducing intermediate factors of production and imported products . Moreover, France develops an economic policy for the food sector as a whole which includes the orientation of production towards the needs of consumers and energy saving techniques . 52 The Japanese alternative of changing the social relations on the land to accommodate Fordism is different from the French alternative which makes improvements on the land and promotes changes in industry to move away from Fordism and into a different food system . Yet in the long run, physical limits to growth under Fordism (diminishing yields with increasing application of inorganic fertiliser), and the crisis of Fordism has turned against Japanese agriculture . 53 It appears, therefore, that Greek agriculture and industry can learn from the French experience and also from the communal treatment of land in the Japanese experience . Theoretically, the following alternatives are open in Greece . (1) Strategy allows the entry of private capital in agriculture and manipulates public policy so as to stimulate change towards bigger landholdings . Such a policy does not offer any real alternative to peasants, does not try to handle and to civilise the process of change and the resulting change stimulates defensiveness and resistance . Moreover, this alternative, to the extent that it continues with the integration of agriculture to the Fordist input system, is likely, in the long run, to lead to diminishing marginal returns . Also, it will tend to classify products according to their physical attributes, which fulfil the needs of Fordist food production and consumption and will not respond significantly to national consumer needs, despite the fact that most agricultural produce is for the national market. (2) Policy centres around a strategy for a national food system without disturbing peasant ownership . It is a strategy concerned with a movement away from Fordism and with encouraging capital in Greece to restructure in favour of the peasant and the consumer . So, it stimulates intersectoral national food linkages and raises the issue of `appropriate' products which help

125

Capital & Class 126

to determine `appropriate' technology . It is concerned that `appropriateness' involves employment considerations and consumer needs which are shaped by national habits and traditions and the political and economic framework of the Greek society . It stimulates a food policy that is concerned with public health while it promotes some import substitution in the production of meats and dairy products . It promotes domestic energy production and examines the advantages of organic farming, with state control over seeds and crop varieties . It tends to establish a'mode of consumption' which cares for health, quality and differentiation and on this basis it attempts to increase the competitive position of Greek exports in specific markets . This policy also has an answer to the requirement for mass production . It argues that those requirements cannot be satisfied by a multitude of smallholdings and encourages large-scale cultivation by following the Japanese example . It stimulates and encourages co-operation in the use of land while small ownership is retained . This means deliberate encouragement for treating land in a collective way and for co-operatives in land as well as in food industry and trade, the last being currently developing relatively rapidly . Such an encouragement involves the obligation to provide them with preferential financial arrangements so that their initiatives and capabilities are not impeded by the expense or shortage of finance or by the lack of technology and expertise which as small landholders they could not afford to buy or use efficiently but collectively they could . Moreover, this policy encourages better land use and an expansion of the area of arable land . In addition, it identifies differentiated national and international needs and encourages cultivation that provides differentiated products . It is, therefore, concerned with the identification and selection of products which satisfy the requirement of mass differentiated production . Likewise, it is concerned with technologies that will satisfy the above products . It, therefore, responds to the need for a national strategy for technology and energy away from Fordism, whether it is education for technology, use of technology or development of technology and energy . Unlike Japanese agriculture, it promotes a mechanised agriculture for mass differentiated production but seeks to replace chemical fertilisers with alternative forms of fertilisers . It argues that this alternative technology is likely to be less costly in the long run for it moves away from the dependence on monopoly-priced Fordist inputs and their destructive effects on soil and yield . To compensate for the higher labour costs it sets against them a strict definition of `active' peasants which prevents easy access to investment funds for speculative schemes and the

Greek Agriculture

movement of locally-generated money outside of the food sector . The advantage of this alternative is that it offers the positive as well as the defensive . It is a defensive alternative against a capitalist transformation of social relations in agriculture and a positive alternative because it . demonstrates that it can handle change since a big change is already going on . In our view, policy cannot ignore change or stand in its way . It has to subordinate change to human requirements and the realities of production and exchange . Peasants should be convinced that policy has the capacity to manage change in a way that gives them the advantages of those changes without making them victims of those changes . Introducing change without further land destruction and longterm diminishing returns, change that does not mean labour displacement and low peasant incomes is not a straightforward matter . But the crisis of previous policies and the current EEC pressure on spending for CAP, and the Mediterranean Programmes have increased the need for action to restructure and redevelop Greek agriculture . A rounded view of food production responds to this need by making sure that national capital restructures in favour of the peasant and the consumer . The resulting socially useful production and technology invigorates social responsibility, generates employment, cheap and better quality food and reproduction away from Fordism . So, anything less than a whole view of food production is likely to lead to inability to confront changes at the national and international level and to impose unrealistic demands on peasants . Let us illustrate this point by looking at food trends that develop in the midst of Fordism's crisis . While the spread of Fordism in the Greek economy remained weak as a type of production and relatively strong as a `mode of consumption', the crisis of Fordism in the developed countries leads to capital restructuring and one of the new forms that have appeared is the so-called neo-Fordism . 54 For our purposes, two characteristics of neo-Fordism are relevant . First neo-Fordism tends to move away from standardised mass production and equipment and into smaller plants using general purpose, adaptable technology . In contrast to Fordism, it tends to compete through innovation (electronics), and energy-saving material . Second, neo-Fordism favours highly skilled labour and so it has an inbuilt incentive to produce for diverse tastes and incomes . So, unlike Fordism, it tends to establish a `mode of consumption' which centres around better quality product differentiation . This second characteristic of neo-Fordism indicates that there has been a consumer-led reaction to Fordist consumption patterns and that neo-Fordism has an incentive for product differentiation . Indeed, there is a growing consumer consciousness of the

127

Capital & Class 128

relation between food and health which has resulted in differentiated consumer needs . In the 1970s this resulted in a growing demand for less refined foods, less additivies and less polysaturated fats . In Europe, Committees on Nutritional Education and on Medical Aspects of Food Policy encouraged dietary change by showing the link between a fat-saturated, sugar-laced diet and killer diseases, i .e . coronary heart disease, diabetes and certain cancers . In the USA, a concerted campaign to improve the nation's unhealthy eating habits produced a cutback in the consumption of milk, cream, butter and eggs and since 1968 deaths from heart disease have been reduced by 25% . Recent surveys in the UK indicate a rise in consumption of fruit juices, chicken, wholemeal bread with butter, eggs and sugar beginning to wane . 55 Thus, many sectors of food production had to cut into canned foods and expand into frozen food . But even so, the trend towards fresh and wholefoods has continued and become much less dependent on agribusiness standardised products . 56 The above trend is of undoubted value to a Greek policy on exports . Once policy is in a position to follow these changes and determine product-development priorities for national and international markets there is scope for alternative technology and energy . Then the campaign for an alternative food system can go against the modernist alternative . I am greatly indebted to Robin Jenkins for comments on an earlier paper entitled 'Fordism and the Crisis of Greek Agriculture', and presented at an International Economic Conference on Economy and the Agricultural Sector, 27-30 November 1984, Athens .

Notes

1 . Vergopoulos, C . (1974) The Issue of Agriculture in Greece, Exantas, Athens (in Greek) . 2. The House of Parliament (1983) Five Year Plan for Econmic and Social Development, 1983-1987, Preliminaries, June, Athens, p . 50 (in Greek) . 3. Fine, B . & Harris, L . (1979) Rereading Capital, Macmillan, London . 4. Mandel, E . (1976) Late Capitalism, New Left Books, 2nd ed ., London . 5 . Aglietta, M . (1979) A Theory of Capitalist Regulation, New Left Books, London . See also, Davis, M . (1978) ' " Fordism" in Crisis : a review of Michel Aglietta's Regulation et crises : L'experience des EtatsUnis', Review, 11, 2, Fall 1978, pp . 207-269 . 6. I have chosen the term 'Fordism' because, more than the other two terms, it emphasises the links between production and consumption, and thereby it helps us to examine the `consumption mode' which is very important in this case and in general . 7. Money, P . R . (1980) Seeds of the Earth, A Private or Public Resource?,

Greek Agriculture

The Canadian Council for International Co-operation, Inter Pares . 8. GLC, Economic Policy Group (1983) Food for a Great City, GLC Strategy towards London's Food Sector, No . 35, London . 9. These companies are not merely agribusiness concerns, but companies drawing their primary profits from pharmaceuticals or petroleumbased business . There are exceptions like ITT, Anderson Clayton and Cargill but the industry appears to be dominated by Ciba-Geigy Sandoz, Pfizer, Upjohn, Mo. Santo, Union Carbide and Royal Dutch/Shell : Seeds of the Earth, ibid ., pp . 55-56 . 10 . Like ICI, British Petroleum and Shell: Body, R . (1982) Agriculture: The Triumph and the Shame, Temple Smith, London . 11 . Kolyvas, J . (1982) Seed Production in Greece, IASEGES, Athens (in Greek) . 12 . GLC, Food for a Great City, op . cit ., p . 43 . 13 . OECD, Agricultural Policy Reports (1982) The Agricultural Policy of Greece, Paris, p . 43, Table 22 . 14 . OECD (1982) The Agricultural Policy of Greece, ibid ., pp . 5 and 10. 15 . GLC, Food for a Great City, op . cit ., p . 19 . 16 . Council on Environmental Quality directed by President Carter (1977) Global 2,000, Report to the President, p . 85 and FAO (1979) Energy for World Agriculture, Agricultural Series, No . 7, p . 53, Rome . Both books indicate that extensive use of energy intensive, yield enhancing inputs - fertiliser, pesticides and fuels - lead to diminishing returns . 17 . For instance, see Griffin, K . (1974) The Political Economy ofAgrarian Change, Macmillan ; and Johnston, B .F . & Kilby P . (1975) Agriculture and Structural Transformation, Oxford University Press . 18 . Gramsci, A . (1972) Selections from the Prison Notebooks, eds Quintin Hoare and Geoffrey Nowell-Smith, London, p . 276 . 19 . Psychogios, D . (1984) `The Extraction of Surplus from Agriculture', International Economic Conference : Economy and the Agricultural Sector, The Agricultural Bank of Greece, November, Athens, p . 2 (in Greek) . 20 . Psychogios, D . ibid ., p . 2 . 21 . Psychogios, D . ibid ., p . 2 . 22 . Psychogios, D . ibid ., p . 3 . 23 . Leventis, N. & Sakellis, M . (1978) Multifragmentation and Effectivity in Agricultural Establishments, Agricultural Bank of Greece, 6, Athens, p . 241 (in Greek) . 24 . Psychogios, D . ibid ., p . 3 . 25 . Gecos, G . (1983) Notes for a Seminar on Agricultural Co-operatives, Ministry of Agriculture (in Greek) . 26 . Gecos, G . ibid . 27 . Louloudis, L . (1984) `Agricultural Modernisation and Policies for the Restructuring of Agriculture', International Economic Conference : Economy and the Agricultural Sector. The Agricultural Bank of Greece, November, Athens, pp . 15-16 (in Greek) . 28 . Ministry of Agriculture, Athens . 29 . Louloudis, L . ibid ., Appendix, Table (II) and p . 17 . 30 . Louloudis, L . ibid ., Appendix, Table (III) and p . 17 . 31 . Louloudis, L . ibid ., Appendix, Tables (IV) and (V) . 32 . Louloudis, L . ibid ., p . 17 . 33 . Ministry of Agriculture, Athens . 34 . Kassimis, Ch . & Stathakis, G . (1984) 'Mavromati - Industrial

129



Capital & Class 130

Development and Socio-Economic Differentiation of an Agricultural Community', International Economic Conference : Economy and the Agricultural Sector, November, Athens (in Greek) . 35 . Pissias, V . (1981) Deadlocks in Agricultural Policy, Historikes Publications, Athens, p . 34 (in Greek) . 36 . Eurostat (1982) Basic Statistics of the Community, p . 246 . 37 . Babanassis, S . & Soulas, C. (1976) Greece in the Periphery of Developed Countries, Themelio, p . 72 (in Greek) . 38 . Ibid ., p . 70 . 39 . Kamarinou, L . (1977) Agriculture and Development in Greece, Nea Synora, pp . 81, 84 (in Greek) ; and Mergos, G . (1980) Fixed Capital in Greek Agriculture, PASEGES, Athens, p . 97, Note (12) . He notes that the consumption of fertiliser increased twenty times in the 1951-76 period . 40 . National Statistical Service of Greece (1972) National Accounts of Greece, No . 21, Athens . 41 . Ibid . 42 . Mergos, G .I . (1980) Fixed Capital in Greek Agriculture, PASEGES, Athens (in Greek) . 43 . NSSG, National Accounts of Greece, No . 21, ibid ., p . 38 . See also Pissias, ibid ., p . 209 . 44 . Pissias, V .ibid ., p . 31 . 45 . See Montague Yudelman et al . (1971) Technological Change in Agriculture and Employment in Developing Countries, OECD, Paris . 46 . Mergos, G.I . (1980) Fixed Capital in Greek Agriculture, PASEGES, p . 94, Athens (in Greek) . 47 . (a) X . Zolotas, Governor of the Bank of Greece, speech at the Academy of Athens, 13 .4 .1976 . (b) A . Pepelassis, Governor of the Agricultural Bank of Greece, `The Problem of Small Holdings', To Vima, 29 .11 .1976 . (c) Nautemporiki, 25 .3 .1976 . 48 . Martinos, N . (1984) `Development Problems : The Deviation of the Use of Resources and the Structure of Demand', International Economic Conference : Economy and the Agricultural Sector, The Agricultural Bank of Greece, November, Athens (in Greek) . 49 . One indication of this is the share of medium-long term loans in private investment : 1960 107 1965 129 1972 238 Source : Babanassis and Soulas, op . cit ., p . 71 . 50 . FAO, Energy for World Agriculture, op . cit ., p . 78 . 51 . A classic discussion of this is : Sen, A . K . (1968) Choice of Techniques, 3rd ed ., Blackwell . 52 . OECD (1983) Committee for Agriculture, Review of Agricultural Poliices in OECD Member Countries, 1980-82, AGR (83) 14, Paris, p . 28 . 53 . OECD (1983) op . cit ., p . 179 . 54 . Blackburn, Ph ., Coombs, R . & Green, K . The Labour Process and Economic Growth : Technology, Fordism and Long Waves, Macmillan, forthcoming . 55 . Sheppard, J . (1984) `Britain's Deadly Died', Marxism Today, October, pp. 17-21 . 56 . GLC, Food for a Great City, op . cit ., pp . 29 and 38 .

History of the Communist Party of Great Britain, 1927-1941

by Noreen Branson (London, Lawrence & Wishart, 1985) £15 h/b, £6 .95 p/b, ISBN 85315 6115, pp . 360 Reviewed by Rachel Sharp

9 O 0

MM

ca

It is perhaps surprising, in view of the significance of the 1920s and 1930s for the subsequent development of the British left, that there exists no definitive overall study of this period . The historiography is dominated by analyses informed by Keynesian hindsight : if only policy-makers had listened to Keynes and his like-minded contemporaries (Mosley before his break with the Labour Party, and Lloyd George and his followers in the Liberal Party), the depths of the Depression could have been avoided . Others more recently, unwilling to engage in such

131

Capital & Class 132

judgements, have tried to distance themselves from the uniformly black picture of mass unemployment, the rise of fascism, and the drive to war . The 1930s, according to this developing revisionist perspective, was a decade of rising prosperity, social and cultural heterogeneity, the suburban house, the motor car, mass entertainment . Empiricism demonstrates that the times were not that bad after all . Both views would have been rejected by that brave group of men and women organised in the Communist Party of Great Britain during those years . Noreen Branson takes up the story of the party's evolution from where James Klugmann's not altogether adequate account of its early years ends : in the defeat of the general strike and the miners in 1926 . She traces the party's development from its near fatal commitment to the `class against class' line, analyses the reassessment of that position in the early 1930s, and provides an illuminating account of the various heroic struggles waged in the 1930s which contributed to the party's growing effectiveness . She also includes a sympathetic but not uncritical discussion of the cP's developing attitude to the Soviet Union, explaining but not exonerating the refusal to confront the implications of the purges, the mass trials, and other aspects of what has become known as Stalinism . The book ends with a consideration of another problematic phase 4.1 the party's history when, between 1939 and 1941, it opposed Britain's involvement in an `imperialist war', until the invasion of the Soviet Union by the Nazis overtook the dictates of Comintern theorisation . Whilst the book does not provide or attempt a definitive Marxist account of

those years, it nevertheless offers a fascinating insight into the party's trajectory which presents numerous challenges to the contemporary left concerning what can be learned from an earlier generation's successes and disastrous mistakes . To those now debating the options for the left in the face of capitalist offensives, mass unemployment, the intensification of militarism and a labour movement large segments of which seemingly refuse to be radicalised, the book could not be more timely . History can, perhaps, teach us some lessons, for however much the capitalist system may have changed, there is a fundamental continuity to it . Branson's analysis is refreshingly free of theoreticist jargon . The intention is clear : to subject the party's history to a stringent appraisal which both avoids the insider's proneness to apologetics and refuses to fall victim to the moralising and easy voluntarism which so often beset those privy to historical hindsight . She had the advantage over some commentators of (indirect) access to the Comintern archives in Moscow, via the notes taken by James Klugmann, which enable her to avoid blaming the party's errors solely on the Comintern's authoritarian interventions . She thus shows how mistaken policies were as much the responsibility of sections of the British Party leadership as of the Comintern, although she does not provide us with a full appraisal of why the latter developed its particular lines, especially that of `class against class' . She is also sensitive to the social and structural roots of mistaken orientations in the British party, given the betrayals of the labour movement by the Labour Party both in government and in opposition

Book Review

and the collaborationist stance of most union leaders . Nevertheless, she is trenchant in her critique of the `class against class' policy, insofar as it marginalised the party during a crucial period and prevented the formation of constructive alliances within the labour movement when the capitalist offensive was most threatening . Despite this critique, she does not adopt the facile position that the party and the Comintern should have been able to see and act differently . `Class against class' did have a real objective basis in historical reality . Consciousness does, unfortunately, often lag behind real events . Branson recounts how the struggles within the party and the course of real events led to a reversal of line (albeit without a full and frank admission that it was a reversal), enabling the party to play a vitally important role in anticapitalist politics as the 1930s proceeded . Its implacable hostility to capitalism and its refusal, unlike the Labour Party, to be seduced by the `aristocratic embrace' led to its preoccupation with defending and organising the unemployed, its involvement in movements for colonial freedom, in rent strikes and tenants' organisations, its leading role in the struggle against fascism, its support for the Republicans in the Spanish civil war, its work among women, its opposition to Appeasement, its work within rank-and-file union movements, its attempts to lay the foundations for a counter-hegemonic culture through its activities among intellectuals, artists, writers and readers . All these activities were part of a broad strategy to develop a people's front from below and above to resist those forces within capitalism on a national and international plane that were attempting to subordinate the

labour movement and defuse the potential for resistance . All contributed to the party's growth both in size and credibility, and help to explain why the adoption of the Comintern line in the early phases of the war was not as debilitating as it might have been, given that Hitler soon obliged by invading the Soviet Union, thus vindicating the party's long-standing struggle against fascism . It is perhaps understandable in a history of a party organised from the top downwards that there should be a tendency to dwell on debates about tactics and strategy within the party leadership . It would however be interesting to learn much more about the social history of the rank-and-file supporters and sympathisers . Branson's history no doubt needs supplementing by detailed local histories and accounts of particular struggles . Nevertheless, whilst the work of oral historians and such groups as History Workshop will undoubtedly provide a fuller and richer picture of the labour movement in this period, it remains true that what is most needed is a comprehensive overview of the period . Branson's book, whilst important and valuable in itself, is no substitute . A definitive history of a Communist Party must simultaneously be the history of the social formation of which it is a part . It is this larger context which structures the possibilities for political intervention and constrains the outcome of particular social struggle . We do not acquire from Branson's history a precise understanding of the nature of the political forces at work within British society during this period, or of the economic parameters within which political strategy and debates were conducted .

133

Capital & Class

134

Much is left implicit . The bourgeois class and its allies do not figure sufficiently prominently in Branson's story and neither do other classes and strata whose alliances, political orientations and actions presumably impinged on the outcome of the cr's struggles . The Labour Party's consistent anticommunism, for example, is described but not explained . We are cetainly told a great deal of the bourgeoisie's attempt to silence the party through repression, censorship, and the courts, but how this was achieved and through what pattern of political and cultural alliances is never fully explored . Nevertheless, for those hegemonised by the notion that Britain is the society of free speech, freedom of assembly, etc ., Branson's history provides a salutory reminder that our ruling class deserves none of the reputation it enjoys in

liberal circles for benignity and is prepared to act ruthlessly whenever its interests are threatened . Although relatively small, the cp in the 1920s and 1930s was deemed significant enough to warrant close attention by the bourgeois state . In the 1980s, when the bourgeois class has much more powerful ideological and repressive instruments at its disposal, what potential is there for radical anticapitalist politics? In commenting on the `class against class' position, Branson argues that the party's economic analysis was correct but that the political conclusion that the working class would develop a revolutionary consciousness did not follow . This is a central question for those on the left now . One can foresee the structural preconditions for a similar `class against class' position

SCIENCE FOR PEOPLE

Sheena Phillips on technology in NATO Military Funding of British universities Brian Easlea on science and masculinity

Book Review

developing in sections of the left, albeit marginalised, were the Labour Party to be voted into office and attempt to implement an alternative economic policy . Would it not suffer the same fate as that of the Mitterrand government? How can the working class be prepared, ideologically and politically, for the failure of Labour's economic policies given that the structural preconditions for their successful implementation do not exist? How can one show that the various alternative economic policies, currently under consideration, far from orchestrating a route out of the crisis of capitalist profitability, may merely accentuate it? And what follows politically from this? Branson's book is particularly useful in that it provides the historical basis for rethinking the foundations of socialist politics in the present . The questions which faced progressives in the labour movement in the 1930s are still with us . The CP in the 1930s was correct in its view that there was no benign route out of the crisis on Labour's terms . The same basic political and economic obstacles which

prevented the adoption of a form of Keynesianism to solve unemployment in the 1930s are still with us, perhaps even more powerful than they were then . If it is true that a `class against class' position was and would be disastrous, how much more is it true that the inability to fashion a socialist politics that is capable of appealing to and radicalising the labour movement makes the same outcome in the present crisis - mass unemployment, fascism, militarism and war - predictable? Whilst it may be unfashionable to talk of class politics, the ruling class has no such qualms in implementing a ruthless class offensive . When Branson's book on the Communist Party is read alongside those of Coates et al on the history of the Labour Party in this period, and when we take stock of the subsequent history of both parties in the post-war era, we cannot avoid concluding that to be true to the heroic traditions of those whose history Branson portrays, we must find a way in the present era of revitalising and popularising the socialist vision which they, at least, still believed in - and saw the necessity of.

135

Capital & Class 136

CSE hUM BEERSHIPP 25 HORSELL ROAD, LONDON N5 CAPITAL AND CLASS Please start/continue my subscription from number :

I enclose : Full Reduced (student, unemployed) Supporting Airmail

UK £ 9 .00 £ 6 .00

Overseas E10.00 £ 6 .00

£20 .00

£20 .00 £20 .00

HEAD AND HAND I would like to subscribe for 3 issues from current/next issue. I enclose : O UK £3.50 O Overseas £4 .50 O Institutions £6 .00

O O O O O U

C&C BACK ISSUES: Please send the following issues Numbers 4-8 (£ 1 .50 each or 3 for £4 .00) Numbers 9, 11, 12 (11 . 50 each) Numbers 13, 14, 15 (£ 1 .80 each) Numbers 10, 16, 17, 18 (£2 .00 each) Numbers 19 and 20 (£2.50 each) Number 21 and subsequent issues) (£3 .00 to members; otherwise £3.50)

Cheques: Payable to CSE Membership and kept separate from CSE Books. Non-sterling cheques : Please add bank clearance charge of £ 1, 00. In all correspondence, including subscription renewal, please quote reference number from address label. Change of address: I have changed my address from

Name Address

Please complete: Job/activities Subjects of interest Institutions ifany Region