Industrial Efficiency and State Intervention: Labour 1939-51

Industrial efficiency and state intervention In Industrial Efficiency and State Intervention Nick Tiratsoo and Jim Tomlinson describe and assess the Labour Party's development of a policy for improving industrial efficiency between 1939 and 1951. The authors concentrate on the debates and initiatives of the wartime period and on the subsequent implementation of policy aimed at raising productivity under Attlee. The book provides two major modifications to existing historio graphy. First, it shows that the prevailing view of Labour between 1945 and 1951, with its emphasis on the creation of the Welfare State, is wrong. Labour saw the correction of social ills as vital, but it also recognised the crucial need for industrial modernisation. Second, this reading demands the re-evaluation of wider theories about Britain's economic decline. If the key difference between Britain and, say, Japan is Britain's lack of a 'developmental state', then, as the book shows, any explanation of this situation is impossible without consideration of the country's political parties and the context within which they have operated. Given this twin purpose, the book should appeal to both specialists interested in party politics and those who are interested in wider questions about Britain's overall contemporary history. Nick Tiratsoo is Lecturer in Social History at the University of Warwick and Visitor in the Business History Unit at the LSE. Jim Tomlinson is Reader in Economic History at Brunel University and Visitor in the Business History Unit at the LSE. Books published under the joint imprint of LSE/Routledge are works of high academic merit approved by the Publications Committee of the London School of Economics and Political Science. These publications are drawn from the wide range of academic studies in the social sciences for which the LSE has an international reputation. Industrial efficiency and state intervention: Labour1939-51 Nick Tiratsoo and Jim Tomlinson First published 1993 by Routledge Published 2017 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN 711 Third Avenue, New York, NY 10017, USA Routledge is an imprint of the Taylor & Francis Group, an informa business Copyright© 1993 N. Tiratsoo and J. Tomlinson Typeset in Times by LaserScript Limited, Mitcham, Surrey The Open Access version of this book, available at www.tandfebooks.com, has been made available under a Creative Commons Attribution-Non Commercial-No Derivatives 4.0 license. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library. Library of Congress Cataloging in Publication Data has been applied for. ISBN 978-0-415-08810-7 (hbk) Harold [Wilson] said he had invented the concept of output per man-shift and even the concept of productivity which had been a theoretical concept before but he had got it extended over all industry. A terrible thing to have on his conscience. (Tony Benn, Against the Tide: Diaries 1973-76, London: 1989, p. 506) instead of fussing about glaring and conspicuous evils, squalor and injustice and distressed areas ... [democratic socialists] have to fuss about the balance of payments, and incentives, and higher productivity. (C.A.R. Crosland, The Future of Socialism, London: 1956, p. 99) Contents List of tables ix Acknowledgements x 1 British industry, state intervention and Labour politics 1900-39 1 2 The production crisis, productivity and the rise of the management question, 1941-4 21 3 Debates and initiatives, 1944-S 44 4 Early post-war efforts, 194S-7 64 S Human relations and productivity, 1947-S1 90 6 The management question again, 1947-S1 111 7 The 'Americanisation' of productivity, 1948-S1 131 8 Evaluation and implications 153 Notes 171 Index 201 Tables Table 2.1 Joint Production Committees at establishments in engineering and allied industries, 1942-4 28 Table 5.1 Firms with Joint Production Committee machinery, 1949 sample 102 Table 5.2 Management assessments of Joint Production Committees in 216 engineering firms, 1950 104 Table 7.1 Estimated savings from increasing batch size of bushes and bearings 147 Acknowledgements The research on which this book is based was partly financed by a grant from the London School of Economics. We should like to thank the Governors of the LSE, Mr Gus Stewart and Dr Terry Gourvish (Director of the Business History Unit) for arranging this support. We would particularly like to acknowledge the considerable encouragement that Terry Gourvish has given us over the last few years: he has gone far beyond the normal call of duty in facilitating the completion of this work. Second, we should like to thank the various archival experts who have helped us in locating documents, especially Sharon Barker and Jennie Butters at the British Institute of Management library, Corby; Dr Sarah Street at the Conservative Party archive, the Bodleian Library, Oxford; Stephen Bird at the Labour Party archive, the Museum of Labour History, Manchester; Dr Richard Storey and staff at the Modern Records Centre, University of Warwick; and the staff at the Public Records Office, Kew. Finally, we are most grateful to James Hinton, Helen Mercer, Neil Rollings, Deborah Spring and Jonathan Zeitlin for providing advice at different points along the way. Chapter 1 British industry, state intervention and Labour politics, 1900-39 The theme of relative industrial and economic decline dominates the historiography of twentieth-century Britain. Whilst there is little agreement on the precise character, scope, timing, let alone causes, of this decline, its central importance in shaping British society seems indisputable. 1 Explanations for this process have ranged over almost every feature of the economy and wider society, these interpretations seemingly being themselves subject to cycles of support and disavowal. Indeed, historical explanations have also frequently been linked to contem porary ideological and political concerns. In the 1960s and 1970s, for example, much emphasis was put on low investment rates as a key problem, in tum often related to the alleged focus of British ruling groups on external economic goals (such as foreign investment and a strong currency) at the expense of the interests of industry.2 In the 1980s two kinds of hypothesis tended to dominate. On the one hand 'cultural' explanations, especially those associated with the names of Martin Wiener and Corelli Barnett, created a 'Thatcherite' history of economic decline, linked to the alleged atrophying of entrepreneurial spirit and an excessive political concern with social welfare at the expense of industry.3 Accompanying this a less politically fashionable but more firmly historically grounded literature emerged, which saw economic failure as a consequence of political blockage, the absence of a state giving priority to industrial modernisation. This view was best summarised by Marquand, who concluded that 'Unlike its counterparts on the mainland of Europe and in Japan, Britain's political class had never managed - even in its interventionist periods - to create an entrepreneurial or developmental state' ,4 though similar views, albeit with varying ideological glosses, appeared in a range of work. 5 Some of the themes raised here could be found in earlier investigations, which 2 Industrial efficiency and state inteNention argued that throughout the twentieth century policy had been excessively either externally oriented or attuned to domestic macro economic goals. However, the originality and insightfulness of the new writing stemmed from its emphasis on the political conditions for a shift to a potentially more successful industrial policy. Much literature on British decline soon collapses into 'grand themes' of cultural malfunction, imperial grandeur and supersession or the dominance of finance capital, with politics read-off as simply a reflection of these over-arching designs or misadventures. 6 In contrast, Marquand, Hall, Newton and Porter, and others underlined the specifics of party strategies, ideologies and organisation in explaining the absence of the political will and capacity to create a 'developmental state'. Such an emphasis on the importance of political parties and their policies is pursued in this book. It is useful to begin by sketching in the kind of history of British economic decline before 1939 that this approach would suggest. First, it is clear that economic decline begins to emerge as a serious political issue around the tum of the century, mainly linked to worries about Britain's waning relative strength as a Great Power. The threat to this position came from a number of sources including perceived failures in competitiveness, largely registered through the trade figures. 7 This initial period of concern saw the emergence of a cross-party alliance of those wanting to address 'efficiency' issues, the Co Efficients. But this group was essentially a small coterie of metropolitan intellectuals whose claim to fame was precisely their novelty and exceptionality, rather than their position as the spearhead of a mass movement. In addition, whilst the Co-Efficients were certainly mindful of industrial efficiency, their focus was in fact very different from that which marked later 'industrial policy', except in regard to the issue of technical education. Their central concerns were, on the one hand, governmental efficiency and, on the other, the efficiency of the worker, thought of largely as a question of physical health.8 Above all, the issue of efficiency lost political

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