Writers whose views are fairly consistently rejected by people with whom they share a number of common assumptions and aspirations should begin to question either their own logic or their clarity of expression. Since A Socialist Wages Policy was published in 1959 its authors have had promptings enough to indulge in such questioning and self-criticism, and the results of some of it can be found in the extentions of the central ideas of that pamphlet which have been published over the years. Bob Rowthorn’s treatment of the incomes policy issue is another such prompting, in places more profound and challenging than the others. We propose to comment first on the interpretation he places on our arguments, then to discuss the logic of his own position and finally to consider the implications of his analysis for our incomes strategy.
The incomes policy tactic we advocate is an attempt to focus the industrial and political strength of the Labour movement in Britain on those parts of the economic and political system which we judge could be pressurized into working in ways more favourable to wage and salary earners. We also consider that this tactic can play a part within a more long-term socialist strategy. Thus suggestions that we nurtured facile optimism about what the Labour Government would attempt or achieve miss the point. What optimism we have hinges upon the Labour movement adopting some variant of this incomes policy strategy.
Because we attach prime importance to these tactical and strategic roles of incomes policy it is misleading to suggest we put emphasis upon foreign competitiveness and rates of exchange. We would support the incomes policy strategy even if Britain were a closed economy. Here Rowthorn is confusing the circumstances which bring the issue of incomes policy into the economic and political arena and the particular approach we urge the Labour movement to adopt in these circumstances.
It is misleading to suggest that we assume trade unions to be the main causes of wage increases at times of full employment and completely false to suggest that we believe ‘that militancy is effective in raising wages faster than productivity’. It is necessary to distinguish two distinct influences. Firstly market forces which might operate even more directly if the unions and collective bargaining machinery did not get in the way, and secondly the institutional pressures reflecting organized class interests. A little exaggeration helps clarify the distinction. Working class organization is most effective when
Discounting the exaggeration, we appear to agree with Rowthorn on this (although he has not detected the agreement). We go on to argue that this limitation on trade union effectiveness under conditions of full employment establishes the case for a shift in the emphasis and focus of union pressures, away from the traditional bargaining table and towards the exertion of political influences on income distribution.
The final complaint we make about Rowthorn’s interpretation of our arguments concerns the devaluation issue. One of us has argued for devaluation and the other has written nothing that could even remotely justify suggesting we make a fetish of avoiding devaluation. The point has already been made that we advance the incomes policy strategy for internal reasons which would apply even of Britain were a closed economy. We have never argued that an incomes policy could, by itself, so strengthen the British economy as to make it impervious to external pressures exerted against a shift to the left in British economic and social policy.
The devaluation question provides a useful starting point for an examination of the logic of Rowthorn’s own position. He disassociates his devaluation from one carried through by a capitalist government but has denied to us the right to argue similarly for our incomes policy strategy. We argue that if the strength of the Labour movement was properly directed it could transform the Brown-Jones incomes policy into a policy which benefits wage and salary earners in the short-run and takes us towards socialism in the longer run whereas Rowthorn does not feel it necessary to explain how Callaghan’s devaluation could be transformed into a policy which favoured employees. To neutralize, far less to socialize, a devaluation presents greater difficulties than to socialize an incomes policy in which the central issue is explicitly ‘who gets what’. The internal logic of capitalism would be working against Rowthorn’s devaluation too, and on grounds more remote from labour and socialist checks and pressures than is the territory of incomes policy.